SCHEDULE 14ADR
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant X
Filed by a party other than the Registrant
Check the appropriate box:
Preliminary proxy statement
X Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
VISHAY INTERTECHNOLOGY, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
(1) Amount previously paid:
$0
(2) Form, Schedule or Registration Statement no.:
Schedule 14ADR--preliminary proxy statement
(3) Filing party:
Registrant
(4) Date filed:
April 17, 1998
1
VISHAY INTERTECHNOLOGY, INC.
63 LINCOLN HIGHWAY
MALVERN, PENNSYLVANIA 19355-2120 USA
April 17, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Vishay Intertechnology, Inc. (the "Company") to be held at 10:30 a.m.
Philadelphia time on the 21st day of May, 1998, at The Four Seasons Hotel,
Ballroom, Lobby Level, One Logan Square, Philadelphia, Pennsylvania 19103. Your
Board of Directors looks forward to greeting personally those stockholders able
to be present.
At the Annual Meeting (the "Annual Meeting") you will be asked to elect
twelve Directors; to approve the Company's 1997 Stock Option Program; to approve
the Company's 1998 Employee Stock Option Program; and to approve the appointment
of Ernst & Young LLP as Auditors for the Company's next audited fiscal year.
The Board of Directors unanimously recommends that you vote FOR the
election of all twelve nominees as Directors, FOR the approval of the Company's
1997 Stock Option Program, FOR the approval of the Company's 1998 Employee Stock
Option Program and FOR the approval of the appointment of the Auditors.
Regardless of the number of shares you may own, it is important that
they are represented and voted at the Annual Meeting. Therefore, please sign,
date and mail the enclosed proxy in the return envelope provided.
At the Annual Meeting, we will also report to you on the Company's
current operations and outlook. Members of the Board and management will be
pleased to respond to any questions you may have.
Your cooperation is appreciated.
Sincerely,
William J. Spires
Secretary
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VISHAY INTERTECHNOLOGY, INC.
63 LINCOLN HIGHWAY
MALVERN, PENNSYLVANIA 19355-2120
NOTICE OF ANNUAL MEETING OF THE STOCKHOLDERS
TO BE HELD MAY 21, 1998
Notice is hereby given that the Annual Meeting of Stockholders of
Vishay Intertechnology, Inc. (the "Company") will be held at The Four Seasons
Hotel, Ballroom, Lobby Level, One Logan Square, Philadelphia, Pennsylvania
19103, on the 21st day of May, 1998 at 10:30 a.m. Philadelphia time, for the
following purposes:
1. to elect twelve Directors for a term of one year and until their
successors are elected and qualified; and
2. to approve the Company's 1997 Stock Option Program; and
3. to approve the Company's 1998 Employee Stock Option Program; and
4. to approve the appointment of Auditors for the Company's next
audited fiscal year.
Action will also be taken upon such other business, if any, as may
properly come before the meeting. The Board of Directors is not presently aware
of any such other business.
The stockholders of record at the close of business on April 9, 1998
will be entitled to vote at the Annual Meeting or at any adjournment thereof. If
you do not expect to attend the meeting in person, please complete, date and
sign the enclosed proxy and return it without delay in the enclosed envelope
which requires no additional postage if mailed in the United States.
By Order of the Board of Directors,
William J. Spires
Secretary
Malvern, Pennsylvania
April 17, 1998
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VISHAY INTERTECHNOLOGY, INC.
63 LINCOLN HIGHWAY
MALVERN, PENNSYLVANIA 19355-2120
PROXY STATEMENT
GENERAL INFORMATION
The accompanying proxy is solicited by the Board of Directors of VISHAY
INTERTECHNOLOGY, INC. ("Vishay" or the "Company") for use at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held at The Four Seasons Hotel,
Ballroom, Lobby Level, One Logan Square, Philadelphia, Pennsylvania 19103, on
the 21st day of May, 1998, at 10:30 a.m. Philadelphia time, and any adjournments
thereof. Stockholders of record at the close of business on April 9, 1998 shall
be entitled to vote at the Annual Meeting.
A list of stockholders entitled to vote at the Annual Meeting will be
available for examination by stockholders of the Company during ordinary
business hours for a period of ten days prior to the Annual Meeting at the
offices of the Company, 63 Lincoln Highway, Malvern, Pennsylvania 19355-2120. A
stockholder list will also be available for examination at the Annual Meeting.
The cost of solicitation of proxies will be borne by the Company. The
Board of Directors may use the services of the Company's Directors, Officers and
other regular employees to solicit proxies personally or by telephone.
Arrangements will be made with brokerage houses and other custodians, nominees
and fiduciaries to forward solicitation material to the beneficial owners of the
shares held of record by such fiduciaries, and the Company will reimburse them
for the reasonable expenses incurred by them in so doing.
The shares represented by the accompanying proxy will be voted as
directed with respect to the election of Directors, with respect to the approval
of the Company's proposed stock option programs and with respect to the approval
of the appointment of Ernst & Young LLP as independent auditors of the Company
(the "Auditors"), OR, if no direction is indicated, will be voted FOR the
election as Directors of the nominees listed below, FOR the approval of the
Company's proposed stock option programs and FOR the appointment of the
Auditors. Each proxy executed and returned by a stockholder may be revoked at
any time thereafter by giving written notice of such revocation to the Secretary
of the Company, by delivering to the Company a properly executed and timely
submitted proxy bearing a later date or by attending the Annual Meeting and
electing to vote in person, except as to any matter or matters upon which, prior
to such revocation, a vote shall have been cast pursuant to the authority
conferred by such proxy.
This Proxy Statement was preceded or is accompanied by the Company's
Annual Report to Stockholders for the fiscal year ended December 31, 1997. This
Proxy Statement and the enclosed form of proxy are being furnished commencing on
or about April 17, 1998.
VOTING OF SHARES
The holders of a majority of the votes represented by the outstanding
shares, present in person or represented by proxy, will constitute a quorum for
the transaction of business. Shares represented by proxies that are marked
"abstain" will be counted as votes present for purposes of determining the
presence of a quorum on all matters. Brokers holding shares for beneficial
owners in "street name" must vote those shares according to specific
instructions they receive from the owners. If instructions are not received,
brokers may vote the shares, in their discretion, depending on the type of
proposals involved. "Broker non-votes" result when brokers are precluded by the
New York Stock Exchange from
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exercising their discretion on certain types of proposals. However, brokers have
discretionary authority to vote on all the proposals being submitted hereby to
the stockholders. Shares that are voted by brokers on some but not all of the
matters will be treated as shares present for purposes of determining the
presence of a quorum on all matters, but will not be treated as shares entitled
to vote at the annual meeting on those matters as to which authority to vote is
withheld by the broker.
The election of each nominee for Director requires a plurality of votes
cast. Accordingly, abstentions and broker non-votes will not affect the outcome
of the election. Approval of the Company's proposed stock option programs and
approval of appointment of the Auditors require the approval of the majority of
votes cast. On these matters the abstentions will have the same effect as a
negative vote. Because Broker non-votes will not be treated as shares that are
present and entitled to vote with respect to a specific proposal a Broker
non-vote will have no effect on the outcome.
The Company has appointed an inspector to act at the Annual Meeting who
shall: (1) ascertain the number of shares outstanding and the voting powers of
each; (2) determine the shares represented at the Annual Meeting and the
validity of the proxies and ballots; (3) count all votes and ballots; (4)
determine and retain for a reasonable period a record of the disposition of any
challenges made to any determinations by such inspector; and (5) certify his
determination of the number of shares represented at the Annual Meeting and his
count of all votes and ballots.
Dr. Felix Zandman directly, beneficially and through a Voting Trust
Agreement, and Mrs. Luella Slaner directly, beneficially and as an Executrix for
the estate of her late husband, Alfred Slaner, have voting power over 59.3% of
the total voting power of the Company's shares and intend to vote FOR the
election of the twelve nominees as Directors, FOR the approval of the stock
option programs and FOR the approval of the appointment of the Auditors. Such
shares are sufficient to approve each proposal regardless of how the other
shares are voted.
5
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
On April 9, 1998, the Company had outstanding 56,487,527 shares of
Common Stock, par value $.10 per share ("Common Stock"), each of which entitles
the holder to one vote, and 7,925,394 shares of Class B Common Stock, par value
$.10 per share ("Class B Stock"), each of which entitles the holder to ten
votes. Voting is not cumulative.
The following table provides certain information, as of April 9, 1998,
as to the beneficial ownership of the Common Stock or the Class B Stock of the
Company for (a) each Director and nominee, (b) each Executive Officer named in
the Summary Compensation Table, (c) the Directors and Executive Officers of the
Company as a group and (d) any person owning more than 5% of the Common Stock.
COMMON STOCK CLASS B STOCK
AMOUNT AND AMOUNT AND PERCENT
NATURE OF NATURE OF OF TOTAL
BENEFICIAL PERCENT BENEFICIAL PERCENT VOTING
NAME OWNERSHIP OF CLASS OWNERSHIP OF CLASS POWER
Felix Zandman(1)(2) 580 * 4,429,978 55.9% 45.8%
Donald G. Alfson(1) 23,654 * -- -- *
Avi D. Eden(1)(2) 28,460 * -- -- *
Robert A. Freece(1) 54,749 * -- -- *
Richard N. Grubb(1) 23,453 * -- -- *
Eliyahu Hurvitz(1) 3,315 * -- -- *
Gerald Paul(1) 23,495 * -- -- *
Edward B. Shils(1) 38,713 * -- -- *
Luella B. Slaner(1)(3) 1,656,115 2.9% 1,649,241 20.8% 13.4%
Mark I. Solomon(1) 5,630 * -- -- *
Jean-Claude Tine(1) 5,444 * -- -- *
Abraham Inbar(1) 6,386 * -- -- *
All Directors and
Executive Officers as
a group (14 persons) 1,932,642 3.4% 6,079,219 76.7% 59.3%
J&W Seligman & Co., Inc.(4) 2,940,350 5.2% -- --
KeyCorp Investment Services
Group(5) 2,973,152 5.3% -- --
* Represents less than 1% of the outstanding shares of such class.
(1) The address of each of the referenced individuals is: c/o Vishay
Intertechnology, Inc., 63 Lincoln Highway, Malvern, PA 19355-2120.
(2) Class B Stock Amount and Nature of Beneficial Ownership and Percent of
Class does not include 1,430,265 shares of Class B Stock held in various
trusts for the benefit of Mrs. Luella Slaner's children and grandchildren
and 352,800 shares of Class B Stock directly owned by Mrs. Slaner's
children, in which Dr. Zandman is a trustee and/or has sole voting power
and Mr. Eden is his successor in trust (together, the "Trustee") under a
Voting Trust Agreement among the Trustee, Mrs. Slaner and certain
stockholders (the "Voting Trust Agreement"). The Voting Trust Agreement
will remain in effect until the earlier of (x) February 1, 2050 or (y) the
death or resignation or inability to act of the last of Dr. Zandman and Mr.
Eden to serve as Trustee, but shall terminate at any earlier time upon the
due execution and acknowledgment by the Trustee of a deed of termination,
duly filed with the registered office of the Company. Percent of Total
Voting Power includes said 1,783,065 shares of Class B stock over
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which Dr. Zandman has sole voting control. Dr. Zandman and Mr. Eden
disclaim beneficial ownership of such shares of Class B Stock.
(3) Includes 557,196 shares of Common Stock and 363,469 shares of Class B Stock
directly owned by Mrs. Slaner, and 1,098,919 shares of Common Stock and
1,285,772 shares of Class B Stock held in the estate of her late husband,
Mr. Alfred Slaner, of which she is the Executrix. Does not include
1,430,265 shares of Class B Stock held in various trusts for the benefit of
her children and grandchildren, for which she disclaims beneficial
ownership.
(4) J&W Seligman & Co., Inc. ("Seligman"), 100 Park Avenue--8th Floor, New
York, New York 10006, and William C. Morris, an owner of a majority of its
outstanding voting securities, reported on a Schedule 13G, dated December
31, 1997, that together they share dispositive power over 2,940,350 shares
of Common Stock. Mr. Morris, as the owner of a majority of such securities,
may be deemed to beneficially own the shares reported by Seligman.
Accordingly, the shares reported on Schedule 13G by William C. Morris
include those shares separately reported by Seligman on Schedule 13G.
(5) KeyCorp Investment Services Group, 127 Public Square, Cleveland, Ohio
44114, reported on a Schedule 13G, dated February 13, 1998, on behalf of
itself and its subsidiary, Spears, Benzak, Solomon & Farrell, Inc., that it
has beneficial ownership of 2,973,152 shares of Common Stock.
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PROPOSAL 1--ELECTION OF DIRECTORS
It is proposed to elect a Board of twelve Directors for the following
year and until their successors are elected and qualified. All of the nominees
set forth in the table below, with the exception of Mr. Abraham Inbar, are
currently members of the Board of Directors. It is intended that the
accompanying form of proxy will be voted for the election of the twelve nominees
unless other instructions are given. Voting is not cumulative. If any nominee
should become unavailable, discretionary authority is reserved by the
individuals named in the proxy to vote for a substitute. Assuming the election
of all twelve nominees, the size of the Board of Directors will be the maximum
currently permitted under the Company's By-laws. During the course of the year,
the Board of Directors may, pursuant to its authority under the By-laws, amend
the By-laws to increase the number of board positions to permit the appointment
of individuals who are closely associated with strategic and joint venture
partners of the Company.
The following sets forth information regarding principal occupation and
other major affiliations during the past five years, as well as the age of each
of the current nominees.
DIRECTORS AND NOMINEES FOR
ELECTION AS DIRECTORS
YEAR
FIRST
PRINCIPAL OCCUPATION ELECTED
NAME AGE AND OTHER DIRECTORSHIPS DIRECTOR
Felix Zandman(1) 69 Chairman of the Board and Chief 1962
Executive Officer of the Company.
President of the Company until
March 1998. Chief Executive Officer
since the Company's inception.
Chairman of the Board since 1989.
Avi D. Eden(1) 50 Vice Chairman of the Board and 1987
Executive Vice President of the Company
since August 1996. General Counsel to the
Company for more than the past five years.
Donald G. Alfson(1) 52 Executive Vice President and Chief 1992
Business Development Officer of
the Company since August 1996. Vice
President of the Company from May 1993
to August 1996. President--Vishay
Electronic Components, North America
and Asia, from April 1992 to August 1996.
Employed since 1972 by Vishay Dale
Electronics, Inc., a subsidiary of the Company.
Robert A. Freece(1) 57 Senior Vice President of the Company 1972
since May 1994. Vice President of the
Company from 1972 until May 1994.
Richard N. Grubb(1) 51 Executive Vice President of the Company 1994
since August 1996. Treasurer and Chief
Financial Officer of the Company since
May 1994. Vice President of the Company
from May 1994 to August 1996. Mr. Grubb
has been associated with the Company in
various capacities since 1972.
Eliyahu Hurvitz 65 President and Chief Executive Officer, 1994
Teva Pharmaceutical Industries Ltd. for
more than the past five years.
8
YEAR
FIRST
PRINCIPAL OCCUPATION ELECTED
NAME AGE AND OTHER DIRECTORSHIPS DIRECTOR
Abraham Inbar 69 Senior Vice President of the Company
since May 1996. President of Vishay
Israel, Ltd., a subsidiary of the Company,
since April 1994. Employed by Vishay Israel
since April 1973.
Gerald Paul(1) 49 President of the Company since 1993
March 1998. Chief Operating Officer
of the Company since August 1996.
Executive Vice President of the Company
from August 1996 to March 1998. Vice
President of the Company from May 1993 to
August 1996. President--Vishay Electronic
Components, Europe from January 1994 to
August 1996. Employed by Vishay Europe
GmbH since February 1978.
Edward B. Shils(2)(3)(4)(5) 82 Consultant; Ph.D.; Director--Wharton 1981
Entrepreneurial Center and George W.
Taylor Professor Emeritus of
Entrepreneurial Studies, The Wharton
School, University of Pennsylvania.
Luella B. Slaner 78 Investor for more than the past five 1989
years.
Mark I. Solomon(2)(3)(4)(5) 58 Chairman of CMS Companies for more than 1993
the past five years.
Jean-Claude Tine 79 Investor for more than the past five 1988
years.
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Employee Stock Plan Committee.
(4) Member of the Compensation Committee.
(5) Member of the Stock Option Committee.
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COMPENSATION OF DIRECTORS
Directors who received annual compensation for their services as
Directors are Dr. Shils and Messrs. Hurvitz, Solomon and Tine who each received
$2,500 for each Board meeting attended. In addition, Dr. Shils and Mr. Solomon
received $2,500 for each Audit Committee and each Compensation Committee meeting
attended. Directors who are also employees of the Company do not receive any
compensation for their role as Directors and are compensated as other executive
officers and key management as described under "Compensation Committee and
Employee Stock Plan Committee Report on Executive Compensation--Executive
Officers and Key Management."
In January 1998, Dr. Shils and Messrs. Hurvitz, Solomon and Tine each
received 1,000 shares of Common Stock. These grants were awarded to reflect the
Company's continued appreciation for the unique role and service provided by
these outside Directors in contributing to the Company's ongoing growth.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors met four times during the twelve months ended
December 31, 1997. The Executive Committee met once during the same period. The
Executive Committee is authorized to exercise all functions of the Board of
Directors in the intervals between meetings of the Board of Directors to the
extent permitted by Delaware law.
The Audit Committee met once during the twelve months ended December
31, 1997. The functions of the Audit Committee include recommending independent
auditors to the Board of Directors, reviewing with the independent auditors the
scope and results of the audit, reviewing the independence of the auditors,
considering the range of audit and non-audit fees and reviewing the adequacy of
the Company's systems of internal accounting controls.
The Employee Stock Plan Committee met twice during the twelve months
ended December 31, 1997. The Employee Stock Plan Committee is authorized, within
the limits of the 1986 stock plans of the Company and its subsidiary, Vishay
Dale Electronics, Inc. (the "Stock Plans"), to determine the individuals who are
to receive grants and the vesting requirements with respect to the Stock Plans
and to administer and interpret the Stock Plans.
The Compensation Committee met once during the twelve months ended
December 31, 1997. The Compensation Committee is authorized to establish and
approve management compensation. See "Compensation Committee and Employee Stock
Plan Committee Report on Executive Compensation."
The Stock Option Committee, which was established in connection with
the 1995 Stock Option Program and the 1997 Stock Option Program (the "Stock
Option Programs"), met once during the twelve months ended December 31, 1997.
The Board does not have a nominating committee.
No Director attended less than 75% of the meetings of the Board and any
committees on which such Director served.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The two members of the Employee Stock Plan Committee and the Stock
Option Committee are Dr. Shils and Mr. Solomon, who are independent Directors of
the Company and who also may not be awarded Common Stock under the Stock Plans
and the Stock Option Programs. Dr. Shils and Mr. Solomon are also the two
members of the Compensation Committee.
LEGAL PROCEEDING
An indictment relating to tax issues was filed by the Jerusalem
district attorney's office against Promedico Ltd. ("Promedico"), as well as
certain of its
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officers, including Mr. Eliyahu Hurvitz, a member of the Board of Directors of
the Company and the President and CEO of Teva Pharmaceutical Industries Ltd.
("Teva"), who served during the period in which Promedico was owned by Teva
(1980-1986) as the chairman of Promedico. The hearings of the case have
concluded and the parties are currently awaiting the judge's decision. The
charges allege: failure to report commissions allegedly received by Promedico,
failure to register such commissions in Promedico's books, failure to pay taxes
which may be due on such commissions, and fraudulent actions regarding the
foregoing. The charges are attributed to Mr. Hurvitz by reason of his serving as
the chairman of the board of directors of Promedico between the years 1980-1986.
Mr. Hurvitz denies any culpability in regard to this matter, and the board of
directors of Teva has expressed its fullest confidence and support of his
ability to continue managing Teva and that Mr. Hurvitz will be fully and
completely exonerated.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth all compensation for the fiscal years
ended December 31, 1997, 1996 and 1995 awarded or paid to the Chief Executive
Officer and the individuals who, in fiscal 1997, were the other four highest
paid executive officers of the Company (collectively the "Five Named Officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
RESTRICTED SECURITIES
STOCK UNDERLYING
NAME AND CAPACITIES OTHER ANNUAL AWARDS OPTIONS/ LTIP ALL OTHER
IN WHICH SERVED YEAR SALARY BONUS(1) COMPENSATION $(2) SARS(#) PAYOUTS COMPENSATION
- --------------- ---- ------ -------- ------------ ---- ------- ------- ------------
Felix Zandman 1997 $722,500 $ 0 (3) None None None $3,200(4)
Chairman of the Board, 1996 $850,000 $ 1,000,000 (3) None None None $3,000(4)
and Chief 1995 $787,500 $ 839,470 (3) None 555,660 None $3,000(4)
Executive Officer
Avi D. Eden(5) 1997 $220,000 $ 0 (3) $96,000 None None $3,200(4)
Vice Chairman of 1996 $190,000 $ 133,000 (3) $28,000 None None None
the Board and 1995 $-- $ -- (3) $ -- (6) -- --
Executive Vice President
Donald G. Alfson(7) 1997 $197,000 $ 190,000 (3) $48,000 None None $3,200(4)
Director, Executive 1996 $189,230 $ 270,000 (3) $28,000 None None $3,000(4)
Vice President 1995 $180,000 $ 165,000 (3) $45,750 138,915 None $3,000(4)
and Chief
Business Development Officer
Richard N. Grubb(8) 1997 $220,000 $ 0 (3) $96,000 None None $3,200(4)
Director, Executive 1996 $190,000 $ 133,000 (3) $28,000 None None $3,000(4)
Vice President, Treasurer1995 $160,000 $ 56,900 (3) $65,000 138,915 None $1,600(4)
and Chief Financial Officer
Gerald Paul(9)(10) 1997 $357,000 $ 0 (3) $96,000 None None None
Director, Chief 1996 $312,000 $ 126,000 (3) $28,000 None None None
Operating Officer 1995 $282,400 $ 53,500 (3) $45,750 138,915 None None
and President
(1) Bonuses paid in any calendar year are based on the results of the previous
calendar year. See "Compensation Committee and Employee Stock Plan
Committee Report on Executive Compensation" which describes
performance-based bonuses awarded to the Five Named Officers.
(2) Dividends accumulate on the restricted stock awards but are paid only upon
the vesting of such awards.
(3) The Company has concluded that the aggregate amount of perquisites and
other personal benefits paid in such period did not exceed the lesser of
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10% of such officer's total annual salary and bonus for each of 1997, 1996
and 1995, respectively, or $50,000. Such perquisites have not been included
in the table.
(4) Represents amounts contributed in 1997, 1996, and 1995 under the Company's
401(k) plan under which the Company matches, up to the annual federally
mandated maximum amounts, an employee's contributions of up to 2% of such
employee's annual salary.
(5) Mr. Eden became an executive officer of the Company during 1996. The amount
listed under his 1996 salary combines amounts paid to him as an employee of
the Company and as a consultant. In 1995, Mr. Eden received consulting fees
of $165,000 and a restricted stock award of $111,900. Moreover, Mr. Eden
held an aggregate of 5,302 shares of restricted stock with a value of
$125,259 at December 31, 1997.
(6) Mr. Eden received 138,915 options under the 1995 Stock Option Program.
(7) Mr. Alfson held an aggregate of 4,980 shares of restricted stock with a
value of $117,652 at December 31, 1997.
(8) Mr. Grubb held an aggregate of 7,892 shares of restricted stock with a
value of $186,448 at December 31, 1997.
(9) Amounts are paid in foreign currency and converted into U.S. dollars at the
weighted average exchange rate for each 12-month period.
(10) Dr. Paul held an aggregate of 7,080 shares of restricted stock with a value
of $167,265 at December 31, 1997.
12
RETIREMENT PLANS
Vishay Dale Electronics, Inc., a wholly owned subsidiary of the Company
("Vishay Dale"), maintains a defined benefit plan for substantially all of its
U.S. full-time employees. The benefits under the plan are based on the
employees' compensation and mandatory contributions to the plan during all years
of participation. For each year of participation, an employee accrues an annual
benefit equal to 2.1% of earnings up to $10,000 and 2.64% of earnings in excess
of $10,000. The plan requires a mandatory contribution by the employee equal to
3.5% of earnings up to $10,000 and 4.4% of earnings in excess of $10,000, up to
the maximum allowable federal limit. Mr. Alfson is the only executive officer or
Director of the Company to participate in the plan. As of January 1, 1996, Mr.
Alfson became a terminated vested participant of this plan and elected to
participate in the Vishay nonqualified defined benefit retirement plan described
below. The estimated annual benefit payable from the Vishay Dale plan, upon Mr.
Alfson's retirement at age 65, would be $28,449.
The Company maintains a nonqualified defined benefit retirement plan
for certain highly compensated employees in the United States. Mr. Grubb, Mr.
Alfson and Mr. Eden are the only executive officers named in the Summary
Compensation Table to participate in the plan. Messrs. Grubb, Alfson and Eden
elected to participate in the plan as of July 1, 1995, January 1, 1996 and July
1, 1997, respectively. During 1997, Messrs. Grubb and Alfson deferred
compensation of $6,950, respectively, and Mr. Eden deferred compensation of
$4,840 under the plan. Additionally, the Company accrued an aggregate liability
of $15,060 for Messrs. Grubb and Alfson and $12,050 for Mr. Eden. The estimated
annual benefit payable upon Messrs. Grubb's, Alfson's and Eden's retirement at
age 65, assuming they (i) continue to be employed by the Company, (ii) continue
to earn the same compensation each earned in 1997 and (iii) make all mandatory
contributions under the plan, would be $63,703 for Mr. Grubb, $61,591 for Mr.
Alfson and $64,758 for Mr. Eden.
Vishay Europe GmbH, a German subsidiary of the Company, has a
noncontributory defined benefit pension plan governed under German law covering
its management and executive employees. Dr. Paul is the only executive officer
named in the Summary Compensation Table to participate in the plan. The pension
benefit is 15% of accrued premiums paid by the employer, plus earnings on plan
assets; each annual premium is 5.5% of annual salary and bonus of up to DM
24,000 ($13,848). The estimated annual benefit payable upon Dr. Paul's
retirement at age 65 is DM 15,873 ($9,159). Dr. Paul also has an individual
contractual pension arrangement with Vishay Europe GmbH that will pay an annual
benefit upon retirement at age 65 based on his years of service (up to 25) and
average salary and bonus in the highest 3 of his final 10 years of employment
("final average compensation"). The retirement benefit will not exceed 40% of
such final average compensation. This pension is reduced by the amount of the
pension benefit described above. Dr. Paul has voluntarily agreed to a maximum
limit of DM 350,000 per year in respect of such final average compensation. Dr.
Zandman may, however, in his sole discretion, elect to increase the DM 350,000
limitation to reflect Dr. Paul's actual salary and bonus, to take into account
cost of living adjustments, or as he may otherwise deem appropriate. The
following table shows the annual pension payable at age 65 based on years of
service and level of final average compensation. At December 31, 1997, Dr. Paul
had 20 years of service.
PENSIONABLE YEARS OF SERVICE OF
-------------------------------
FINAL AVERAGE COMPENSATION 10 15 20 25 30 35
-- -- -- -- -- --
100% of pensionable income in 1997 $ 58,858 $ 70,633 $ 82,407 $ 94,174 $109,174 $126,563
110% of pensionable income in 1997 $ 64,744 $ 77,696 $ 90,648 $103,592 $120,091 $139,219
120% of pensionable income in 1997 $ 70,630 $ 84,759 $ 98,889 $113,009 $131,009 $151,875
150% of pensionable income in 1997 $ 88,291 $105,949 $123,607 $141,265 $163,765 $189,849
200% of pensionable income in 1997 $117,723 $141,265 $164,814 $188,356 $218,356 $253,135
All U.S. dollar amounts relating to Dr. Paul's retirement plans, including those
listed on the foregoing chart, have been converted at the weighted average
exchange rate for the 12 months ended December 31, 1997.
13
STOCK OPTIONS
The table below sets forth certain 1997 fiscal year-end information
regarding the exercise of stock options granted pursuant to the 1995 Stock
Option Program to the Five Named Officers and the 1997 fiscal year-end value of
unexercised options, provided on an aggregated basis.
The officers listed in the table below received grants of three options
on March 19, 1995, each at a different exercise price, pursuant to the Company's
1995 Stock Option Program approved by the stockholders on May 19, 1995. The
options are fully vested. Prior to March 1, 1999, no option may be exercised
upon less than six months advance notice. In addition, the right to exercise any
option expires and terminates immediately if the recipient is terminated from
the Company's services for cause or voluntarily leaves the Company. If a
recipient leaves the Company for any reason other than cause or voluntary
termination, then options may be exercised by that recipient for 30 months from
the date of termination, provided the recipient adheres to a non-competition
agreement. If such recipient fails to comply, his options expire and terminate
immediately. Any of these foregoing provisions, however, may be waived at the
discretion of the Stock Option Committee.
1995 STOCK OPTION PROGRAM
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND
1997 FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED 1997 FISCAL YEAR-END(1) AT FISCAL YEAR-END
-------- ------------------------- ------------------------
ON VALUE EXER- UNEXER- EXER- UNEXER-
NAME EXERCISE REALIZED CISABLE CISABLE CISABLE CISABLE
- ---- -------- -------- ------- ------- ------- -------
Felix Zandman (2) -- 555,660 -- $0 --
Avi D. Eden (2) -- 138,915 -- $0 --
Donald G. Alfson (2) -- 138,915 -- $0 --
Richard N. Grubb (2) -- 138,915 -- $0 --
Gerald Paul (2) -- 138,915 -- $0 --
(1) Adjusted for 5% stock dividend paid on June 9, 1997.
(2) No stock options were exercised by any of the Named Executive Officers
during the Company's 1997 fiscal year.
COMPENSATION COMMITTEE AND EMPLOYEE STOCK PLAN COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors, comprised of two
independent Directors, is responsible for establishing and approving the
compensation and benefits provided to the Chief Executive Officer and certain
other executive officers and key management of the Company. The Employee Stock
Plan Committee of the Board of Directors, comprised of two independent
Directors, recommends awards under the Stock Plans and whether such stock should
be restricted.
The Company's executive officers and key management generally receive a
base salary and a performance-based annual cash and/or stock (restricted and
unrestricted) bonus. This compensation formula is designed to attract and retain
management talent capable of achieving the Company's business objectives, while
motivating management to lead the Company to meet or exceed annual performance
goals, thereby enhancing stockholder value.
14
On November 13, 1997, the Board of Directors approved the 1997 Stock
Option Program, a stock option program for certain selected individuals,
including the Chief Executive Officer. In addition, on March 16, 1998 the Board
of Directors approved the 1998 Employee Stock Option Program, a stock option
program for employees of the Company, including the Chief Executive Officer. The
programs, which are subject to stockholder approval, provide specified
individuals believed to be key to the success of the Company with grants of
options to purchase shares of the Company's Common Stock. The purpose of the two
programs is to enhance the long-term performance of the Company and to provide
selected individuals an incentive to remain in the service of the Company by
acquiring an additional proprietary interest in the Company. See descriptions of
both programs under Proposals 2 and 3.
Chief Executive Officer
Dr. Zandman's compensation is determined under the terms of his
employment contract (see "Employment Contract") and under a performance-based
compensation plan for the Chief Executive Officer (the "162(m) Cash Bonus Plan")
recommended by the Compensation Committee and approved by the Company's
stockholders in 1994.
Dr. Zandman's base salary is determined primarily by considering (i)
the Company's financial performance in view of the performance of companies
similar in size and character, (ii) the compensation of officers of companies
similar in size and character, including some of the companies listed as peer
group companies, (iii) Dr. Zandman's 36 years of dedication and service to the
Company from the date of its incorporation and (iv) the Company's financial
performance in comparison to previous years. For 1998, Dr. Zandman's base salary
will be $975,000. This represents a 35% increase from Dr. Zandman's 1997 base
salary (which was 15% less than Dr. Zandman's 1996 salary) as a result of the
Company's growth from acquisitions and its achievement of the after-tax profits
base bonus threshold set last year.
Under the 162(m) Cash Bonus Plan, the Chief Executive Officer's
performance bonus has been structured so that Dr. Zandman's aggregate annual
compensation will depend in large part on the annual after-tax profits of the
Company. The Compensation Committee has focused in recent years particularly on
the net earnings of the Company because the Committee believes net earnings to
be a strong gauge of the growth and success of the Company. Since the Company's
net earnings in 1997 exceeded the $42 million base bonus threshold, Dr. Zandman
received a $339,000 bonus for the Company's 1997 performance based upon a
pre-approved formula.
Under the formula approved by the Compensation Committee for 1998, Dr.
Zandman will be awarded a cash performance bonus if the Company achieves
after-tax profits above a base of $42 million. The bonus will be a cash amount
equal to 3% of net after-tax profits above $42 million. Applying this formula,
the cash bonus has been capped at $1,250,000 for 1998. The Compensation
Committee set these after-tax profit targets by considering the Company's
historical growth and that growth in relation to growth in the Company's
industry in general, and setting thresholds in relation thereto that it believes
will allow the Chief Executive Officer to earn a base salary at or above the
median for surveyed companies with an opportunity to attain levels generally
higher than those of Chief Executive Officers for surveyed companies if Vishay
achieves certain after-tax profits. This formula may only be adjusted or waived
by the Board of Directors upon recommendation of the Compensation Committee
following each fiscal year.
Policy on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code ("Section 162(m)") limits
to $1 million the annual tax deduction for compensation paid to the Chief
Executive Officer and any of the four highest paid other executive officers
unless certain requirements for performance-based compensation are met. The
Compensation Committee considered these requirements and designed the 162(m)
Cash Bonus Plan of the Chief Executive Officer and the 1995 Stock Option Program
accordingly,
15
although the changes required to the already existing performance bonus plan for
the Chief Executive Officer were minimal. The Committee currently intends to
continue to comply with the requirements of Section 162(m) but reserves the
right to alter the 162(m) Cash Bonus Plan and the Stock Option Programs
(including the 1998 Employee Stock Option Program) if doing so would be in the
best interests of the Company and its stockholders.
Executive Officers and Key Management
For the other executive officers and certain key management of Vishay,
base salaries are set annually essentially by considering the average
compensation of similarly situated officers of companies similar in size and
character including some of the companies listed as peer group companies.
Performance bonuses are also awarded annually to these individuals. The
performance bonus is primarily based upon the after-tax profits of the Company
as a whole or, for some executives, the operating profits of the Company or of
the relevant division of the Company for which such officer has primary
responsibility. In addition, from time to time, Dr. Zandman may, together with
an executive, devise a project, the goal of which, if achieved, would entitle
the executive to an additional bonus. Under the formula approved for 1998,
certain of the key management will be entitled to performance bonuses equal to
0.4% of after-tax profits above a base of $42 million. Any bonus awarded may be
granted in cash and/or in Common Stock of the Company, in addition to Common
Stock available through the 1997 Stock Option Program and 1998 Employee Stock
Option Program. The portion of each bonus paid in cash and the portion awarded
in stock (which may be either restricted or unrestricted stock) is determined by
the Employee Stock Plan Committee, in its discretion, relying in large part,
however, upon the recommendation of Dr. Zandman. The base salaries and
performance bonuses are structured to give the executive officers and key
management the incentive to maximize the operating and after-tax profits of the
Company as a whole with optimum fiscal efficiency. Accordingly, base salaries
are set at or below the median for the surveyed companies, with an opportunity
for total compensation at or above the median when after-tax profit targets are
met.
Respectfully submitted,
THE COMPENSATION COMMITTEE THE EMPLOYEE STOCK PLAN COMMITTEE
Edward B. Shils Edward B. Shils
Mark I. Solomon Mark I. Solomon
EMPLOYMENT CONTRACT
On March 15, 1985, the Company and Dr. Zandman entered into a long-term
employment agreement. The agreement, which was for an initial term of seven
years, provides for automatic annual extensions through 1996 of such seven-year
period. The agreement also provides that the Board of Directors may increase Dr.
Zandman's compensation (including his bonus) from time to time as it deems
advisable, subject to certain parameters, including a required comparison every
three years of Dr. Zandman's compensation to that of officers of companies of
similar size and character. Dr. Zandman's compensation under the agreement may
not be less than $250,000 per year. The agreement may terminate prior to its
expiration date in the event of death, disability or cause. In the event that
the agreement is terminated other than as a result of death, disability, cause
or pursuant to voluntary termination by Dr. Zandman, or as a result of a breach
of the agreement by the Company, Dr. Zandman will be entitled to a royalty from
the date of such termination or breach to the later to occur of (i) the tenth
anniversary of such date or (ii) Dr. Zandman's 75th birthday. The amount of such
royalty, based on the gross sales by the Company of products incorporating any
inventions made by Dr. Zandman after the date of the agreement, payable
quarterly, shall be equal to 5% of the gross sales, less returns and allowances,
for each such year of products of the Company that incorporate Dr. Zandman's
inventions after the date of the agreement.
16
PERFORMANCE GRAPH
The line graph below compares the cumulative total shareholder return
on the Company's Common Stock over a 5-year period with the return on the
Standard & Poor's 500 Stock Index and with the return on a peer group of
companies selected by Westergaard Research Corp. utilizing BRIDGE Information
Systems, Inc. Network I275 industry grouping. The peer group is made up of 24
publicly-held manufacturers of semiconductors, capacitors, resistors and other
electronic components, including the Company.(1) The return of each peer issuer
has been weighted according to the respective issuer's stock market
capitalization. The line graph assumes that $100 had been invested at December
31, 1992 and assumes that all dividends were reinvested.
[GRAPHIC OMITTED]
INDEXED RETURNS
Base
Period
Company Name/Index Dec92 Dec93 Dec94 Dec95 Dec96 Dec97
- -------------------------------------------------------------------------------------------------------------------
VISHAY INTERTECHNOLOGY 100 108.08 158.31 213.71 165.63 176.24
S&P 500 INDEX 100 110.08 111.53 153.45 188.68 251.63
PEER GROUP 100 139.97 191.66 229.34 234.40 244.05
17
(1)Advanced Micro Devices, Inc., Alpha Industries, American Annuity Group,
American Technical Ceramics Corp., Analog Devices, Inc., Appian Technology Inc.
(bankrupt), CTS Corp., Cypress Semiconductor Corp., Dallas Semiconductor
Corporation, Dense-Pac Microsystems Inc., Diodes Inc., EA Industries (formerly
Electronic Associates Inc.), International Rectifier Corporation, Jetronic
Industries Inc., Kyocera Corp., LSI Logic Corporation, M/A Com Inc., National
Semiconductor Corporation, Semtech Corp., Solitron Devices Inc., Texas
Instruments Incorporated, Unitrode Corporation, Varian Associates Inc., Vishay
Intertechnology, Inc.
18
PROPOSAL 2--APPROVAL OF COMPANY'S
1997 STOCK OPTION PROGRAM
On November 13, 1997, the Board of Directors authorized, subject to
stockholder approval, the Vishay Intertechnology, Inc. 1997 Stock Option Program
(the "1997 Program"). The 1997 Program would provide stock options to purchase
shares of the Company's Common Stock at various exercise prices to individuals
believed to be key to the success of the Company, including executive officers,
key employees and consultants of the Company and its subsidiaries, and joint
ventures and similar entities in which the Company or any subsidiary has an
equity or similar interest. The purpose of the 1997 Program is to enhance the
long-term performance of the Company and to provide selected individuals an
incentive to remain in the service of the Company by acquiring a proprietary
interest in the success of the Company.
STOCKHOLDER APPROVAL
Section 162(m)of the Internal Revenue Code limits to $1 million the
annual tax deduction for compensation paid to a publicly-traded company's Chief
Executive Officer and any of the four highest paid other executive officers,
subject to certain exceptions, including an exception for stockholder-approved
performance-based compensation programs. Because executive officers are eligible
to receive options under the 1997 Program, in order for income realized upon
exercise of options granted under the 1997 Program to be so qualified, the
material terms of the 1997 Program must be approved by stockholders. In
addition, stockholder approval of the 1997 Program is required by the New York
Stock Exchange.
The following material terms of the performance goals under the 1997
Program are submitted for stockholder approval:
o Eligibility under the 1997 Program applies to executive
officers, key employees and consultants of the Company and its
subsidiaries, and of joint ventures and similar entities in
which the Company or any subsidiary has an equity or similar
interest.
o The maximum number of stock options that may be granted to a
participant under the 1997 Program for any one calendar year
is limited to options with respect to 530,000 shares of the
Company's Common Stock.
In view of the foregoing, there will be presented at the Annual Meeting
a proposal to approve the adoption of the 1997 Program.
SUMMARY OF KEY FEATURES OF THE 1997 PROGRAM
The following summary of the key features of the 1997 Program is
qualified by reference to the full text of the 1997 Program, which is attached
to this Proxy Statement as Exhibit A. Please refer to Exhibit A for a complete
description of the terms of the 1997 Program.
ADMINISTRATION OF THE PROGRAM
The 1997 Program will be administered by the Stock Option Committee,
currently Messrs. Shils and Solomon, who are not employees of the Company, are
"non-employee" directors within the meaning of Rule 16b-3 of the Exchange Act
and are "outside" directors within the meaning of Section 162(m) of the Internal
Revenue Code. The members of the Stock Option Committee shall be appointed by,
and serve at the pleasure of the Board of Directors.
The Stock Option Committee shall have the authority (a) to determine
the individuals to whom stock options shall be granted and the terms and
provisions of stock options, subject to the provisions of the 1997 Program, (b)
to exercise all of the powers granted to it under the 1997 Program, (c) to
construe, interpret and implement the 1997 Program and all agreements related
thereto, (d)
19
to prescribe, amend and rescind rules and regulations relating to the 1998
Program, including rules governing its own operations, (e) to make all
determinations necessary or advisable in administering the 1997 Program, (f) to
correct any defect or omission and reconcile any inconsistency in the 1997
Program and (g) to amend the 1997 Program to reflect changes in applicable law.
ELIGIBLE PARTICIPANTS; MAXIMUM NUMBER OF SHARES
Under the 1997 Program, three options, each covering one-third of the
amounts set forth below, have been granted to the following of the Five Named
Officers:
1997 Stock Option Program
Name Number of Options
Felix Zandman 530,000
Avi D. Eden 135,000
Richard N. Grubb 135,000
Gerald Paul 135,000
In addition, the remaining 520,000 shares of Common Stock available
under the 1997 Program have been authorized for granting to other individuals
selected by the Stock Option Committee from among those eligible to receive
option grants under the 1997 Program.
The number of shares authorized for issuance under the 1997 Program and
the number of shares subject to outstanding awards will be adjusted for changes
in the Company's capital structure, such as a stock split or stock dividend.
STOCK OPTIONS
The 1997 Program permits the granting of nonqualified stock options.
Options vest immediately upon the date of the grant. Each option will expire ten
years from the date the option is granted. Of the three options granted to each
optionee (including those not listed), one shall have an option exercise price
equal to 100% of the fair market value of a share of Common Stock on the
business day preceding the date of grant, one shall have an option exercise
price equal to 115% of the fair market value of a share of the Common Stock on
the business day preceding the date of grant, and one shall have an option
exercise price equal to 125% of the fair market value of a share of Common Stock
on the business day preceding the date of grant. Options may be exercised either
by paying the purchase price in cash or by any other method permitted by the
Stock Option Committee.
TERMINATION OF SERVICES
Unless the Stock Option Committee determines otherwise: (a) a
recipient's right to exercise any option expires and terminates immediately if
the recipient is terminated from the Company's services for cause or voluntarily
leaves the Company, (b) if a recipient's service terminates due to death or
disability, the recipient's options will generally be exercisable for three
years after termination to the extent they were exercisable on the date of
termination, and (c) if a recipient's service with the Company terminates for
any other reason, the recipient's options will generally be exercisable for 30
months after termination to the extent exercisable on the date of termination.
AMENDMENTS
The Board of Directors is authorized to amend the 1997 Program, except
that stockholder approval is required for any amendment to the extent necessary
to comply with applicable law or regulation. The Committee may amend any
20
outstanding option, except that no amendment may materially impair any rights or
increase any obligations of a recipient without the recipient's consent.
FEDERAL INCOME TAX CONSEQUENCES
There are generally no Federal tax consequences either to the recipient
or to the Company upon the grant of a stock option. On exercise of an option,
the amount by which the fair market value of the Common Stock on the date of
exercise exceeds the option exercise price will generally be taxable to the
recipient as compensation income, and will generally be deductible for tax
purposes by the Company. The disposition of shares of Common Stock acquired upon
exercise of a stock option will generally result in a capital gain or loss for
the recipient, but will have no tax consequences for the Company.
RECOMMENDED VOTE
The Board of Directors, which approved the 1997 Program without the
participation of any individual eligible to receive options under the program,
recommends a vote FOR the adoption of the 1997 Program. The 1997 Program will
not be implemented if it is not approved by the affirmative vote of the holders
of a majority of the votes cast present in person or by proxy and voting thereon
at the Annual Meeting.
21
PROPOSAL 3--APPROVAL OF COMPANY'S
1998 EMPLOYEE STOCK OPTION PROGRAM
On March 16, 1998, the Board of Directors authorized, subject to
stockholder approval, the Vishay Intertechnology, Inc. 1998 Stock Option Program
(the "1998 Program"). The 1998 Program would provide stock options to purchase
shares of the Company's Common Stock at fair market value on the date of the
option grant to individuals believed to be key to the success of the Company.
The purpose of the 1998 Program is to enhance the long-term performance of the
Company and to provide selected individuals an incentive to remain in the
service of the Company by acquiring a proprietary interest in the success of the
Company.
STOCKHOLDER APPROVAL
Section 162(m) of the Internal Revenue Code limits to $1 million the
annual tax deduction for compensation paid to a publicly-traded company's Chief
Executive Officer and any of the four highest paid other executive officers,
subject to certain exceptions, including an exception for stockholder-approved
performance-based compensation programs. Because executive officers are eligible
to receive options under the 1998 Program, in order for income realized upon
exercise of options granted under the 1998 Program to be so qualified, the
material terms of the 1998 Program must be approved by stockholders. In
addition, stockholder approval of the 1998 Program is required by the New York
Stock Exchange.
The following material terms of the performance goals under the 1998
Program are submitted for stockholder approval:
o Eligibility under the 1998 Program applies to all executive
officers and key employees of the Company and any entity owned
more than 50% by the Company.
o The maximum number of stock options that may be granted to a
participant under the 1998 Program for any one calendar year
is limited to options with respect to 30,000 shares of the
Company's Common Stock.
In view of the foregoing, there will be presented at the Annual Meeting
a proposal to approve the adoption of the 1998 Program.
SUMMARY OF KEY FEATURES OF THE 1998 PROGRAM
The following summary of the key features of the 1998 Program is
qualified by reference to the full text of the 1998 Program, which is attached
to this Proxy Statement as Exhibit B. Please refer to Exhibit B for a complete
description of the terms of the 1998 Program.
ADMINISTRATION OF THE PROGRAM
The 1998 Program will be administered by the Stock Option Committee,
currently Messrs. Shils and Solomon, who are not employees of the Company, are
"non-employee" directors within the meaning of Rule 16b-3 of the Exchange Act
and are "outside" directors within the meaning of Section 162(m) of the Internal
Revenue Code. The members of the Stock Option Committee shall be appointed by,
and serve at the pleasure of, the Board of Directors.
The Stock Option Committee shall have the authority (a) to determine
the employees of the Company or its affiliates to whom stock options shall be
granted and the terms and provisions of stock options, subject to the provisions
of the 1998 Program, (b) to exercise all of the powers granted to it under the
1998 Program, (c) to construe, interpret and implement the 1998 Program and all
agreements related thereto, (d) to prescribe, amend and rescind rules and
regulations relating to the 1998 Program, including rules governing its own
22
operations, (e) to make all determinations necessary or advisable in
administering the 1998 Program, (f) to correct any defect or omission and
reconcile any inconsistency in the 1998 Program and (g) to amend the 1998
Program to reflect changes in applicable law.
ELIGIBLE PARTICIPANTS
The Stock Option Committee has the authority to select employees to
whom awards are given, and may solicit the recommendations of the Chief
Executive Officer in making these selections. The identification of key
employees will be based upon a subjective evaluation of each individual's
performance and expected future contribution to the Company. In granting awards
the Committee will also give consideration to the amount and nature of similar
awards granted by peer companies.
MAXIMUM NUMBER OF SHARES
Up to 1,500,000 shares of Common Stock may be granted under the 1998
Program. Shares subject to options that expire or are forfeited and owned shares
that are surrendered to exercise options will also be available under the
program, subject to an overall limit of 1,500,000 shares. This number will be
adjusted for changes in the Company's capital structure, such as a stock split
or stock dividend. Shares delivered under the 1998 Program may be in the form of
authorized and unissued shares or treasury shares.
TYPE OF AWARDS
The 1998 Program permits the granting of nonqualified stock options
and, in the case of employees who are nonresident foreign nationals, other types
of awards that are payable in cash.
STOCK OPTIONS
The Stock Option Committee will determine the number of shares of
Common Stock issuable pursuant to each stock option and the exercise or purchase
price per share of each stock option, but the exercise price may not be less
than 100% of the fair market value of the Common Stock on the date of the grant.
Options will be exercisable at such time or times as determined by the Stock
Option Committee, and will expire no later than ten years from the date the
option is granted. Options may be exercised either by paying the purchase price
in cash or by any other method permitted by the Stock Option Committee. The 1998
Program will terminate on March 16, 2008.
Because the Stock Option Committee has discretion to determine the
persons to whom options will be granted, the date on which such options will be
granted and the number of shares subject to each option grant, it is not
possible to determine the benefits or amounts that will be received by any
particular individual or individuals in the future.
TERMINATION OF EMPLOYMENT
Unless the Stock Option Committee determines otherwise: (a) all of a
recipient's options that have not yet been exercised will terminate upon
termination for cause; (b) if a recipient's employment terminates for reasons
other than cause, death, disability or retirement, the recipient's options will
generally be exercisable for 60 days after termination to the extent they were
exercisable on the date of termination; and (c) if a recipient's employment with
the Company terminates due to death, disability or retirement, then the time at
which the recipient's options are exercisable may be accelerated and the options
will terminate on the earlier of 12 months following the recipient's termination
of employment or the expiration date of the options. If the recipient of an
option violates the terms of a confidentiality and noncompetition agreement with
the Company during the 12-month period following his or her termination of
employment, then the recipient's options may terminate and the recipient may be
23
required to repay to the Company any gain recognized upon the exercise of an
option following the recipient's termination of employment.
AMENDMENTS
The Board of Directors is authorized to amend the 1998 Program, except
that stockholder approval is required for any amendment to the extent necessary
to comply with applicable law or regulation. The Stock Option Committee may
amend any outstanding option, except that no amendment may materially impair any
rights or increase any obligations of a recipient without the recipient's
consent.
FEDERAL INCOME TAX CONSEQUENCES
There are generally no Federal tax consequences either to the recipient
or to the Company upon the grant of a stock option. On exercise of an option,
the amount by which the fair market value of the Common Stock on the date of
exercise exceeds the option exercise price will generally be taxable to the
recipient as compensation income, and will generally be deductible for tax
purposes by the Company. The disposition of shares of Common Stock acquired upon
exercise of a stock option will generally result in a capital gain or loss for
the recipient, but will have no tax consequences for the Company.
RECOMMENDED VOTE
The Board of Directors, which approved the 1998 Program without the
participation of any individual eligible to receive options under the program,
recommends a vote FOR the adoption of the 1998 Program. The 1998 Program will
not be implemented if it is not approved by the affirmative vote of the holders
of a majority of the votes cast present in person or by proxy and voting thereon
at the Annual Meeting.
24
PROPOSAL 4--ELECTION OF INDEPENDENT AUDITORS
The Board of Directors recommends that the public accounting firm of
Ernst & Young LLP be appointed independent auditors of the Company for the
Company's next audited fiscal year ending December 31, 1998. Ernst & Young LLP
have been the Company's auditors since 1968. Representatives of Ernst & Young
LLP are expected to be present at the Annual Meeting to respond to appropriate
questions from the Company's stockholders and will have the opportunity to make
a statement at the Annual Meeting if they desire to do so.
OTHER BUSINESS
As of the date of this Proxy Statement, the only business which the
Board of Directors intends to present and knows that others will present at the
Annual Meeting is that hereinabove set forth. If any other matter or matters are
properly brought before the Annual Meeting or any adjournment thereof, it is the
intention of the person named in the accompanying form of proxy to vote the
proxy on such matters in accordance with their judgment on such matters.
AVAILABILITY OF FORM 10-K
Information regarding the executive officers of the Company is hereby
incorporated by reference to the Company's most recent Report on Form 10-K. The
Company will provide to any stockholder, upon written request and without
charge, a copy of such report, including the financial statements, as filed with
the Securities and Exchange Commission. All requests for such reports should be
directed to Richard N. Grubb, Executive Vice President, Vishay Intertechnology,
Inc., 63 Lincoln Highway, Malvern, Pennsylvania 19355-2120, telephone number
(610) 644-1300.
AVAILABILITY OF ANNUAL REPORT TO SECURITY HOLDERS
The financial statements and the schedules thereto of the Company are
hereby incorporated by reference to the Company's annual report to security
holders, a copy of which will be furnished to the Securities and Exchange
Commission and delivered to security holders together with this proxy statement.
PROPOSALS OF SECURITY HOLDERS
Any stockholder proposal intended to be presented at the Company's 1999
Annual Meeting should be sent to the Company at 63 Lincoln Highway, Malvern,
Pennsylvania 19355-2120 and must be received on or prior to December 23, 1998,
to be eligible for inclusion in the Company's Proxy Statement and form of proxy
to be used in connection with the 1999 Annual Meeting.
/s/ William J. Spires
-----------------
William J. Spires
Secretary
April 17, 1998
25
EXHIBIT A
VISHAY INTERTECHNOLOGY
1997 STOCK OPTION PROGRAM
1. Purpose
The Vishay Intertechnology 1997 Stock Option Program (the "Program")
provides for the grant of options to purchase shares of common stock ("Common
Stock") of Vishay Intertechnology, Inc. (the "Company") to selected individuals.
The purpose of the Program is to enhance the long-term performance of the
Company and to provide for the selected individuals an incentive to remain in
the service of the Company by acquiring a proprietary interest in the success of
the Company.
2. Administration
2.1 The Program shall be administered by a committee (the "Committee")
of the board of directors of the Company (the "Board"), which shall consist of
not less than two directors. The members of the Committee shall be appointed by,
and serve at the pleasure of, the Board. To the extent required for transactions
under the Program to qualify for the exemptions available under Rule 16b-3
("Rule 16b-3") promulgated under the Securities Exchange Act of 1934 (the "1934
Act"), all actions relating to awards to persons subject to Section 16 of the
1934 Act shall be taken by the Board unless each person who serves on the
Committee is a "non-employee director" within the meaning of Rule 16b-3 or such
actions are taken by a sub-committee of the Committee (or the Board) comprised
solely of "non-employee directors". To the extent required for compensation
realized from awards
under the Program to be deductible by the Company pursuant to section 162(m) of
the Internal Revenue Code of 1986 (the "Code"), the members of the Committee
shall be "outside directors" within the meaning of section 162(m).
2.2 The Committee shall have the authority (a) to exercise all of the
powers granted to it under the Program, (b) to construe, interpret and implement
the Program and any Agreements (as defined in Section 3.4), (c) to prescribe,
amend and rescind rules and regulations relating to the Program, including rules
governing its own operations, (d) to make all determinations necessary or
advisable in administering the Program, (e) to correct any defect, supply any
omission and reconcile any inconsistency in the Program, and (f) to amend the
Program to reflect changes in applicable law.
2.3 Action of the Committee shall be taken by the vote of a majority of
its members. The determination of the Committee on all matters relating to the
Program or any Agreement shall be final, binding and conclusive. No member of
the Committee shall be liable for any action or determination made in good faith
with respect to the Program or any award thereunder.
3. Options
3.1 The following options shall be granted under the Program:
3.1.1 Subject to Sections 3.7 and 12, each individual listed
below (together with each individual who receives an option grant under Section
3.1.2, an "Optionee") shall be granted three options as of the close of business
on November 13, 1997,
-2-
each such option to cover one-third (1/3) of the total number of shares of
Common Stock set forth next to the Optionee's name.
Felix Zandman 530,000 shares
Avi D. Eden 135,000 shares
Richard N. Grubb 135,000 shares
Gerald Paul 135,000 shares
3.1.2 Subject to Sections 3.7 and 12, in addition to the options
granted pursuant to Section 3.1, the Committee may grant options to purchase
shares of Common Stock to such directors, officers, other employees and
consultants of the Company and its subsidiaries, and of joint ventures,
partnerships and similar business organizations in which the Company or any
subsidiary has an equity or similar interest, in such amounts as the Committee
shall determine in its discretion, provided that the total number of shares of
Common Stock which may be transferred pursuant to options granted under this
Section 3.1.2 shall not exceed 520,000 shares. Each grant pursuant to this
Section 3.1.2 shall consist of three options, each such option to cover
one-third (1/3) of the total number of shares granted to the Optionee.
3.2 If the number of shares subject to each of the three options
granted to an Optionee pursuant to Section 3.1.1 or 3.1.2 would include any
fractional shares, then such fractional shares shall be aggregated and the whole
shares resulting therefrom allocated by the Committee among such options.
-3-
3.3 The total number of shares of Common Stock with respect to which
options may be granted to any Optionee during any calendar year shall not exceed
530,000 shares.
3.4 Options granted under the Program shall be nonqualified, that is,
not intended to qualify under Section 422 of the Code. Each option shall be
evidenced by a written agreement ("Agreement") which shall contain such
provisions as the Committee may deem necessary or desirable. By accepting an
option, an Optionee thereby agrees that the option shall be subject to all of
the terms and provisions of the Program and the applicable Agreement.
3.5 Subject to Section 3.7, of the three options granted to each
Optionee pursuant to Section 3.1.1 or 3.1.2, one shall have an option exercise
price equal to 100% of the Fair Market Value (as defined in Section 3.8) of a
share of the Common Stock on the business day next preceding the date of grant,
one shall have an option exercise price equal to 115% of the Fair Market Value
of a share of the Common Stock on the business day next preceding the date of
grant, and one shall have an option exercise price equal to 125% of the Fair
Market Value of a share of the Common Stock on the business day next preceding
the date of grant.
3.6 Each option granted under the Program shall become fully vested on
the later of (a) the date of grant of the option or (b) the date on which the
Company's stockholder's approve the Program, and may thereafter be exercised as
to all or any portion
-4-
of the shares subject thereto. The unexercised portion of each option shall
expire and terminate at 12:01 a.m. on the tenth anniversary of the date of
grant.
3.7 If there is any change in the outstanding shares of Common Stock by
reason of a stock dividend or distribution, stock split-up, recapitalization,
combination or exchange of shares, or by reason of any merger, consolidation,
spinoff or other corporate reorganization in which the Company is the surviving
corporation, the total number of shares available for option grants under the
Program, the number of shares subject to each outstanding option and the
exercise price per share under each such option shall be equitably adjusted by
the Committee, whose determination shall be final, binding and conclusive. After
any adjustment made pursuant to this Section 3.7, the number of shares subject
to each outstanding option shall be rounded up to the nearest whole number.
3.8 The "Fair Market Value" of a share of Common Stock on any day shall
be the last sale price of the Common Stock on the New York Stock Exchange or, if
no reported sales take place on the applicable date, the average of the high bid
and low asked price of the Common Stock as reported for such date or, if no such
quotation is made on such date, on the next preceding day on which there were
quotations, provided that such quotations shall have been made within the ten
(10) business days preceding the applicable date. In the event that the Fair
Market Value cannot be thus determined, it shall be determined in good faith by
the Committee.
-5-
4. Exercise
4.1 The exercise of any option shall require the filing of a written
notice with the Company in such manner as the Committee shall prescribe. Payment
for the shares being purchased shall be made on the date of exercise: (a) by
certified or official bank check (or the equivalent thereof acceptable to the
Company) for the full option exercise price, or (b) at the discretion of the
Committee and to the extent permitted by law, by such other provision as the
Committee may from time to time prescribe.
4.2 Promptly after receiving payment of the full option exercise price,
the Company shall, subject to the provisions of Section 8, deliver to the
Optionee, or to such other person as may then have the right to exercise the
option, a certificate for the shares of Common Stock for which the option has
been exercised.
5. No Rights as a Stockholder
No Optionee (or other person having the right to exercise an option)
shall have any of the rights of a stockholder of the Company with respect to
shares subject to an option until the issuance of a stock certificate to such
person for such shares. Except as otherwise provided in Section 3.7, no
adjustment shall be made for dividends, distributions or other rights (whether
ordinary or extraordinary, and whether in cash, securities or other property)
for which the record date is prior to the date such stock certificate is issued.
-6-
6. Termination
6.1 An Optionee shall be deemed to have a "termination of service" upon
ceasing to be employed by the Company and all of its subsidiaries. The Committee
may in its discretion determine (a) whether any leave of absence constitutes a
termination of service for purposes of the Program, (b) the impact, if any, of
any such leave of absence on outstanding options, and (c) when a change in a
non-employee's association with the Company constitutes a termination of service
for purposes of the Plan. The Committee shall also have the right to determine
whether an Optionee's termination of service is a termination for cause and the
date of termination in such case, which date the Committee may retroactively
deem to be the date of the action that is cause for dismissal. Such
determinations of the Committee shall be final, binding and conclusive.
6.2 Except to the extent otherwise provided in the applicable
Agreement, if an Optionee becomes disabled or dies during service or during the
period in which the Optionee's options are exercisable pursuant to Section 6.4,
any outstanding option shall be exercisable on the following terms and
conditions: (a) exercise may be made only to the extent that the Optionee was
entitled to exercise the option on the date of death or disability and (b)
exercise must occur by the earlier of the third anniversary of the Optionee's
disability or death or the expiration date of the option. Any exercise of an
option following an Optionee's death shall be made only by the Optionee's
executor or administrator, unless the Optionee's will specifically disposes of
such award, in which case such exercise shall be made only by the recipient of
such specific disposition. If an Optionee's personal
-7-
representative or the recipient of a specific disposition shall be entitled to
exercise an option pursuant to the preceding sentence, such representative or
recipient shall be bound by all the terms and conditions of the Program and the
applicable Agreement which would have applied to the Optionee.
6.3 Except to the extent otherwise provided in the applicable
Agreement, the unexercised portion of any option shall expire and terminate upon
(a) termination of the Optionee's service by reason of dismissal for cause or
(b) voluntary termination of service by the Optionee.
6.4 Except to the extent otherwise provided in the applicable
Agreement, if an Optionee's service terminates for any reason other than as
provided in Sections 6.2 and 6.3 above, any outstanding option shall be
exercisable on the following terms and conditions: (a) exercise may be made only
to the extent that the Optionee was entitled to exercise the option on the date
of such termination and (b) exercise must occur by the earlier of 30 months
after the Optionee's service terminates or the expiration date of the option;
provided, however, that if such termination of service occurs prior to the third
anniversary of the date of grant of the option, then the option may not be
exercised during the 24-month period following such termination of service.
Notwithstanding the foregoing, no option may be exercised pursuant to this
Section 6.4 if the Company in its sole discretion determines that the Optionee
has, at any time during the 24-month period following termination of service,
directly or indirectly, (a) become an employee, officer, partner, holder of an
ownership interest (other than ownership, as a passive investor, of up to 1% of
the equity securities of a
-8-
public company), agent, consultant or director of any person or entity engaged
in a business that competes with the business of the Company, (b) interfered in
any material respect with any contractual or business relationship of the
Company or (c) solicited the employment of any person who was during such
24-month period, a director, officer, partner, employee, agent or consultant of
the Company. For purposes of this Section 6.4, the term "the Company" shall
include the Company and its affiliates and direct and indirect subsidiaries.
7. Tax Withholding
As a condition to the receipt of any shares of Common Stock pursuant to
exercise of an option granted hereunder, the Company shall be entitled to
require that the Optionee remit to the Company an amount sufficient in the
opinion of the Company to satisfy any federal or other governmental tax
withholding obligation on the part of the Company relating to such exercise. At
the discretion of the Committee, the Optionee may satisfy such withholding
obligation by electing to have the Company withhold from delivery shares of
Common Stock having a Fair Market Value equal to the amount of tax to be
withheld. For this purpose, Fair Market Value shall be determined as of the date
on which the amount of tax to be withheld is determined (and any fractional
share amount shall be settled in cash).
8. Restrictions
8.1 If the Committee shall at any time determine that any Consent (as
hereinafter defined) is necessary or desirable as a condition of, or in
connection with, the issuance of shares under the Program or the taking of any
other action thereunder (each such action being hereinafter referred to as a
"Program Action"), then such Program Action shall
-9-
not be taken, in whole or in part, unless and until such Consent shall have been
effected or obtained to the full satisfaction of the Committee.
8.2 The term "Consent" as used herein with respect to any Program
Action means (a) any and all listings, registrations or qualifications in
respect thereof upon any securities exchange or under any federal, state or
local law, rule or regulation, (b) any and all written agreements and
representations by the Optionee with respect to the disposition of shares, or
with respect to any other matter, which the Committee shall deem necessary or
desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made and (c) any and all consents,
clearances and approvals in respect of a Program Action by any governmental or
other regulatory bodies.
9. Nonassignability
Except to the extent otherwise provided in the applicable Agreement, no
option granted under the Program shall be assignable or transferable other than
by will or by the laws of descent and distribution, and all such options shall
be exercisable during the life of the Optionee only by the Optionee or his legal
representative.
-10-
10. Right of Discharge Reserved
Nothing in the Program or in any Agreement shall confer upon any
Optionee the right to continue as an employee, director or executive officer of
the Company or affect any right which the Company may have to terminate such
employee, director or executive officer.
11. Amendment
The Board may amend the Program, and the Committee may amend any
outstanding Agreement, in any respect whatsoever, except that no such amendment
shall impair any material rights or increase any material obligations of any
Optionee under any option without the consent of the Optionee (or, after the
Optionee's death, the person having the right to exercise the option). An
amendment shall be subject to stockholder approval to the extent necessary to
comply with applicable law or regulation.
12. Effective Date
The Program was adopted by the Board on November 13, 1997, subject to
approval by the Company's stockholders. All options granted under the Program
prior to such stockholder approval are subject in their entirety to such
approval. If such approval is not obtained at the first annual meeting of the
Company's stockholders to occur after the adoption of the Plan by the Board, the
Program and all options thereunder shall terminate and be of no further force
and effect.
-11-
13. Governing Law
All rights and obligations under the Program shall be construed and
interpreted in accordance with the laws of the State of Delaware, without giving
effect to principles of conflict of laws.
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EXHIBIT B
VISHAY INTERTECHNOLOGY, INC.
1998 STOCK OPTION PROGRAM
- --------------------------------------------------------------------------------
VISHAY INTERTECHNOLOGY, INC.
1998 STOCK OPTION PROGRAM
TABLE OF CONTENTS
Section Page
1. Purpose.........................................................1
2. Definitions.....................................................1
3. Administration..................................................3
4. Shares Available................................................4
5. Eligibility.....................................................5
6. Granting of Stock Options.......................................5
7. Exercise of Stock Options.......................................7
8. Employees Based Outside of the United States....................8
9. No Rights as a Stockholder......................................8
10. Consents and Approvals..........................................8
11. Right to Discharge Reserved.....................................8
12. Amendment.......................................................9
13. Term of the Program.............................................9
14. Indemnification.................................................9
15. Successors......................................................9
16. Severability....................................................10
17. Governing Law...................................................10
VISHAY INTERTECHNOLOGY, INC.
1998 STOCK OPTION PROGRAM
1. Purpose
The Vishay Intertechnology 1998 Stock Option Program (the "Program") provides
for the grant of options to purchase Common Stock of Vishay Intertechnology,
Inc. (the "Company") to executive officers and key employees of the Company and
its subsidiaries. The purpose of the Program is to enhance the long-term
performance of the Company and to provide the selected individuals with an
incentive to improve the growth and profitability of the Company by acquiring a
proprietary interest in the success of the Company.
2. Definitions
Whenever used in the Program, the masculine pronoun shall be deemed to include
the feminine, the singular to include the plural, unless the context clearly
indicates otherwise, and the following capitalized words and phrases shall have
the meaning set forth below unless the context plainly requires a different
meaning:
(a) "Agreement" means the written stock option agreement between the
Company and a Participant described in Section 6.1, or other
documentation evidencing a Stock Option.
(b) "Beneficiary" The person or persons designated by a Participant to
exercise a Stock Option in the event of the Participant's death while
employed by the Company, or in the absence of such designation, the
executor or administrator of the Participant's estate.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means conduct by a Participant amounting to (1) fraud or
dishonesty against the Company, (2) willful misconduct, repeated
refusal to follow the reasonable directions of the Board of Directors
of the Company, or knowing violation of law in the course of
performance of the duties of Participant's employment with the
Company, (3) repeated absences from work without a reasonable excuse,
(4) intoxication with alcohol or drugs while on the Company's premises
during regular business hours, (5) a conviction or plea of guilty or
no contest to a felony or a crime involving dishonesty, or (6) a
breach or violation of any Company policies regarding employee
conduct, or a breach or violation of the terms of any employment or
other agreement between Participant and the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" means the Stock Option Committee of the Board of Directors
of the
Company.
(g) "Common Stock" means the Common Stock, par value $0.10 per share of
the Company.
(h) "Company" means Vishay Intertechnology, Inc. a Delaware corporation,
or any successor organization.
(i) "Consent" has the meaning prescribed in Section 10 below.
(j) "Disability" means a physical or mental condition which, in the
judgment of the Committee, permanently prevents a Participant from
performing his usual duties for the Company or such other position or
job which the Company makes available to him and for which the
Participant is qualified by reason of his education, training and
experience. In making its determination the Committee may, but is not
required to, rely on advice of a physician competent in the area to
which such Disability relates. The Committee may make the
determination in its sole discretion and any decision of the Committee
shall be binding on all parties.
(k) "Employee" means a full-time, nonunion, salaried employee, as that
term is understood under the common law, of the Company.
(l) "Exercise Price" means the price per share at which Common Stock may
be purchased upon exercise of a Stock Option.
(m) "Expirathion Date" means the last date upon which a Stock Option can
be exercised, as described in Section 6.2.
(n) "Fair Market Value" means, for any particular date, the last sale
price of the Common Stock on the New York Stock Exchange or, if no
reported sales take place on the applicable date, the average of the
high bid and low asked price of the Common Stock as reported for such
date or, if no such quotation is made on such date, on the next
preceding day on which there were quotations, provided that such
quotations shall have been made within the ten (10) business days
preceding the applicable date. In the event that the Fair Market Value
cannot be thus determined, it shall be determined in good faith by the
Committee.
(o) "Involuntary Termination" means a Termination of Employment but does
not include a Termination of Employment for Cause or a Voluntary
Resignation.
(p) "Participant" means an eligible Employee to whom a Stock Option is
granted pursuant to the Program.
(q) "Program" means the 1998 Vishay Intertechnology, Inc. Stock Option
Program.
(r) "Program Action" has the meaning prescribed in Section 10 below.
2
(s) "Retirement" means a Termination of Employment from the Company or a
Subsidiary, with the consent of the Company, on or after the "normal
retirement age" defined under any tax qualified retirement plan
maintained by the Company.
(t) "Stock" means the Company's common stock, $.10 par value.
(u) "Stock Option" or "Option" means a right to purchase shares of Common
Stock granted pursuant to Sectionh 6 of this Program, which shall not
be treated as an incentive stock option under section 422 of the Code.
(v) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the
time of the granting of the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock equal to
50% or more of the total combined voting power of all classes of stock
in one of the other corporations in the chain.
(w) "Termination of Employment" means the termination of the
employee-employer relationship between a Participant and the Company
or a Subsidiary, regardless of the fact that severance or similar
payments are made to the Participant, for any reason, including, but
not limited to, a Voluntary Resignation, Involuntary Termination,
termination for Cause, death, Disability or Retirement. The Committee
shall, in its absolute discretion, determine the effect of all matters
and questions relating to a Termination of Employment, including, but
not by way of limitation, the question of whether a leave of absence
constitutes a Termination of Employment, or whether a Termination of
Employment is for Cause.
(x) "Voluntary Resignation" means a Termination of Employment as a result
of the Participant's resignation.
3. Administration
3.1 The Program shall be administered by the Committee, which shall consist
of at least two directors who are not eligible to participate in the Program and
are not Employees of the Company or a Subsidiary. The members of the Committee
shall be appointed by, and serve at the pleasure of, the Board. To the extent
required for transactions under the Program to qualify for the exemptions
available under Rule 16b-3 promulgated under the Securities Exchange Act of
1934, the members of the Committee shall be "non-employee directors" within the
meaning of Rule 16b-3. To the extent required for compensation realized from
Stock Options to be deductible by the Company pursuant to section 162(m) of the
Code, the members of the Committee shall be "outside directors" within the
meaning of section 162(m).
3.2 The Committee shall have full authority, in its discretion, (a) to
determine the Employees of the Company or any Subsidiary to whom stock options
shall be granted and the terms and provisions of stock options, subject to the
provisions of this Program, (b) to exercise all of the powers granted to it
under this Program, (c) to construe, interpret and implement the
3
Program and any Agreement, (d) to prescribe, amend and rescind rules and
regulations relating to this Program, including rules governing its own
operations, (e) to determine the terms and provisions of the respective
Agreement with each Participant, (f) to make all determinations necessary or
advisable in administering the Program, and (g) to correct any defect, supply
any omission and reconcile any inconsistency in the Program. The Committee's
determination under the Program need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, stock options
under the Program (whether or not such persons are similarly situated). The
Committee's decisions shall be final and binding on all Participants.
3.3 Action of the Committee shall be taken by the vote of a majority of its
members. The determination of the Committee on all matters relating to the
Program or any Agreement (including, without limitation, the determination as to
whether an event has occurred resulting in a forfeiture or a termination or
reduction of the Company's obligations in accordance with the terms of this
Program) shall be final, binding and conclusive. No member of the Committee
shall be liable for any action or determination made in good faith with respect
to the Program or any award thereunder.
4. Shares Available
4.1 Subject to adjustment in accordance with Section 4.2, the number of
shares of Common Stock for which stock options may be granted under this Program
is 1,500,000, which may consist of treasury shares or authorized but unissued
shares. The maximum number of shares of Common Stock subject to Stock Options
granted under this Program to any participating Employee for any year shall not
exceed 30,000 shares, subject to adjustment in accordance with Section 4.2,
below. To the extent permitted by law, any shares of Common Stock attributable
to the nonvested, unexercised or otherwise unsettled portion of any Stock Option
that is forfeited, canceled, expires or terminates for any reason without
becoming vested, exercised or otherwise settled in full shall again be available
for the grant of Stock Options under this Program, and any shares of Common
Stock tendered to the Company in payment of the Exercise Price of a Stock Option
shall also be available for the grant of Stock Options under this Program,
provided that no more than 1,500,000 shares of Common Stock cumulatively shall
be available under this Program at any time.
4.2 If there is any change in the outstanding shares of Common Stock by
reason of a stock dividend or distribution, or stock split-up, or by reason of
any merger, consolidation, spinoff or other corporate reorganization in which
the Company is the surviving corporation, the number of shares that may be
delivered under the Program and the number of shares subject to each outstanding
Option award, and, if appropriate, the Exercise Price under each such Option,
shall be equitably adjusted by the Committee, whose determination shall be
final, binding and conclusive. After any adjustment made pursuant to this
Section 4.2, the number of shares subject to each outstanding Option shall be
rounded up to the nearest whole number.
5. Eligibility
Officers and other Employees of the Company or a Subsidiary who are responsible
for or contribute to the management, growth, and profitability of the business
of the Company or a
4
Subsidiary are eligible for participation in this Program. The selection of
Employees for participation in the Program shall be made by the Committee, based
on a subjective evaluation of each individual's performance and expected future
contribution to the Company and its Subsidiaries, and may take into account the
recommendations of the Chief Executive Officer of the Company.
6. Granting of Stock Options
6.1 Grant of Stock Options. The Committee, in its discretion, may grant
Stock Options during any year that this Program is in effect to any eligible
Employee. The terms of each Stock Option shall be contained in an Agreement,
which shall contain the number of shares of Common Stock covered by the Option,
the period during which the Option may be exercised, the Exercise Price, and any
additional terms and conditions not inconsistent with this Program that the
Committee deems to be appropriate. The Committee shall have complete discretion
in determining the number of shares of Common Stock subject to each Option grant
(subject to the share limitations set forth in Section 4.1) and, consistent with
the provisions of this Program, the terms, conditions and limitations pertaining
to each Option. The terms of Options need not be uniform among Participants. By
accepting a Stock Option, a Participant thereby agrees that the Option shall be
subject to all of the terms and conditions of this Program and the applicable
Agreement.
6.2 Option Term. The duration of each Option shall be specified in the
Agreement and shall not exceed ten (10) years.
6.3 Option Price. The Exercise Price of the Common Stock purchasable under
any Stock Option shall be determined by the Committee and set forth in each
Agreement, subject to adjustment in accordance with Section 4.2. The Exercise
Price shall not be less than the Fair Market Value of a share of Common Stock on
the date the Option is granted.
6.4 Exercise of Stock Options. Each Agreement shall contain a vesting
schedule, which shall specify when the Stock Option shall become vested and thus
exercisable; provided, however, that subsequent to the grant of an Option, the
Committee, at any time before complete termination of such Option, may
accelerate the time or times at which such Option may be exercised in whole or
in part, and may permit the Participant or any other designated person acting
for the benefit of the Participant to exercise all or any part of the Option
during all or part of the remaining Option term specified in Section 6.1,
notwithstanding any provision of the Agreement to the contrary.
5
6.5 Termination of Employment.
(a) Death or Disability. If an Optionee has a Termination of
Employment as a result of death or Disability, the time at which the unexercised
portion of any Option becomes exercisable may be accelerated, including to make
the Option immediately exercisable in full. Except as otherwise provided in an
applicable Agreement, the Option shall expire and terminate on the earlier of
the Expiration Date or the last day of the 12th month following the Optionee's
death or disability. Any exercise of an Option following an Optionee's death
shall be made only by the Optionee's executor or administrator, unless the
Optionee's will specifically disposes of such award, in which case such exercise
shall be made only by the recipient of such specific disposition. If an
Optionee's personal representative or the recipient of a specific disposition
shall be entitled to exercise an Option pursuant to the preceding sentence, such
representative or recipient shall be bound by all the terms and conditions of
the Program and the applicable Agreement which would have applied to the
Optionee.
(b) Retirement. If an Optionee has a Termination of Employment due to
Retirement, the time at which the unexercised portion of an Option becomes
exercisable may be accelerated, including to make the Option immediately
exercisable in full. Except as otherwise provided in an applicable Agreement,
the Option shall expire and terminate on the earlier of the last day of the
Option term or the last day of the 12th month after the Optionee's retirement.
(c) Other Termination. Except as otherwise provided in an applicable
Agreement, if an Optionee has a Termination of Employment for reasons other than
as provided in subsections (a) and (b) above, the unexercised portion of any
Option shall expire and terminate on the earlier of the Expiration Date of the
Option or on the 60th day after the Optionee's termination; provided, however,
that the unexercised portion of any Option (including any vested portion) shall
expire and terminate immediately upon a Termination of Employment for Cause.
Notwithstanding the foregoing, no Option may be exercised pursuant to this
Section 6.5 if the Company in its sole discretion determines that the Optionee
has, at any time during the 12-month period following Termination of Employment
violated the terms of any agreement with the Company or a Subsidiary regarding
(i) engaging in a business that competes with the business of the Company or any
Subsidiary, (ii) interfering in any material respect with any contractual or
business relationship of the Company or any Subsidiary, or (iii) soliciting the
employment of any person who was during such 12-month period, a director,
officer, partner, Employee, agent or consultant of the Company or a Subsidiary.
In the event that a Participant violates the terms of any such agreement during
such 12-month period, the Agreement may provide for all Stock Options issued to
the holder pursuant to the Program to be forfeited and for disgorgement of any
gain realized upon the exercise of an Option within a stated period preceding
the violation.
6.6 Transfer of Option. Unless the Committee determines otherwise at the
time an Option is granted, no Option granted under the Program shall be
assignable or transferable other than by will or by the laws of descent and
distribution, and all such options shall be exercisable during the life of the
Optionee only by the Optionee or his legal representative.
6
6.7 Substituted Options. Notwithstanding anything to the contrary in this
Section 6, any Option issued in substitution for an Option previously issued by
another entity, which substitution occurs in connection with a transaction to
which Code Section 424(a) is applicable, may provide for an exercise price
computed in accordance with such Code Section and the regulations thereunder and
may contain such other terms and conditions as the Committee may prescribe to
cause such substitute Option to contain as nearly as possible the same terms and
conditions (including the applicable vesting and termination provisions) as
those contained in the previously issued Option being replaced thereby.
7. Exercise of Stock Options
7.1 A Stock Option shall be exercised by the delivery of a written notice of
exercise to the Vice President and Secretary of the Company, or such other
person specified by the Committee, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment of
the Exercise Price and any required withholding taxes. Payment of the Exercise
Price for the shares of Common Stock being purchased shall be made: (a) by
certified or official bank check (or the equivalent thereof acceptable to the
Company), or (b) at the discretion of the Committee and to the extent permitted
by law, by such other provision as the Committee may from time to time
prescribe. The Committee may allow exercises to be made by means of a "cashless
exercise," with the delivery of payment as permitted under Federal Reserve Board
Regulation T, subject to applicable securities law restrictions, or by any other
means which the Committee determines to be consistent with the Program's purpose
and applicable law. Payment shall be made on the date that the Option or any
part thereof is exercised, and no shares shall be issued or delivered upon
exercise of an Option until full payment has been made by the Participant.
Promptly after receiving payment of the full Exercise Price, the Company shall,
subject to the provisions of Section 10, deliver to the Participant, or to such
other person as may then have the right to exercise the Option, a certificate
for the shares of Common Stock for which the Option has been exercised.
7.2 The Company shall withhold any taxes required to be withheld by federal,
state or local government. The Company shall have the right to require a
Participant to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for shares. A Participant may pay the withholding
tax in cash, or, if the Agreement provides, a Participant may also elect to have
the number of shares of Stock he is to receive reduced by the smallest number of
whole shares of Common Stock which, when multiplied by the Fair Market Value of
the shares determined as of the Tax Date (defined below), is sufficient to
satisfy federal, state and local, if any, withholding taxes arising from the
exercise of a stock option. Any such election must be made on or before the date
on which the amount of tax required to be withheld is determined.
7
8. Employees Based Outside of the United States
Notwithstanding any provision of this Program to the contrary, in order to
foster and promote the achievement of the purposes of the Program, or to comply
with these provisions in other countries in which the Company or any Subsidiary
operates or have Employees, the Committee, in its sole discretion, shall have
the power and authority to (i) determine which Employees employed outside the
United States are eligible to participate in the Program, (ii) modify the terms
and conditions of any options granted to Employees who are employed outside the
United States (including the grant of stock appreciation rights, as described in
the following paragraph, in lieu of stock options), and (iii) establish
subprograms, modified Option exercise procedures and other terms and procedures
to the extent such actions may be necessary or advisable.
The Committee in its discretion may grant stock appreciation rights in lieu of
stock options to Employees employed outside the United States. A stock
appreciation right shall provide an Employee the right to receive in cash the
difference between the Fair Market Value of a share of Common Stock on the grant
date and the exercise date, and otherwise shall have the same terms and
conditions as a Stock Option granted hereunder.
9. No Rights as a Stockholder
No Participant (or other person having the right to exercise an option) shall
have any of the rights of a stockholder of the Company with respect to shares
subject to an Option until the issuance of a stock certificate to such person
for such shares, except as otherwise provided in Section 4.2.
10. Consents and Approvals
If the Committee shall at any time determine that any Consent (as hereinafter
defined) is necessary or desirable as a condition of, or in connection with, the
issuance of shares under the Program or the taking of any other action
thereunder (each such action being hereinafter referred to as a "Program
Action"), then such Program Action shall not be taken, in whole or in part,
unless and until such Consent shall have been effected or obtained to the full
satisfaction of the Committee. The term "Consent" as used herein with respect to
any Program Action means (a) any and all listings, registrations or
qualifications in respect thereof upon any securities exchange or under any
federal, state or local law, rule or regulation, (b) any and all written
agreements and representations by the Participant with respect to the
disposition of shares, or with respect to any other matter, which the Committee
shall deem necessary or desirable to comply with the terms of any such listing,
registration or qualification or to obtain an exemption from the requirement
that any such listing, qualification or registration be made and (c) any and all
consents, clearances and approvals in respect of a Program Action by any
governmental or other regulatory bodies.
11. Right of Discharge Reserved
Nothing in the Program or in any Agreement shall confer upon any Participant the
right to continue as an Employee or executive officer of the Company or any
Subsidiary, or affect any
8
right which the Company may have to terminate such Employee or executive
officer.
12. Amendment
The Board may amend the Program, and the Committee may amend any outstanding
Agreement, in any respect whatsoever, except that no amendment to an outstanding
Agreement shall materially impair any rights or materially increase any
obligations of any Participant under any Option without the consent of the
Participant (or, after the Participant's death, the person having the right to
exercise the option). An amendment shall be subject to stockholder approval to
the extent necessary for compliance with Code section 162(m) and other
applicable law or regulation.
13. Term of the Program
This Program shall be effective on March 16, 1998, the date adopted by the Board
of Directors of the Company, subject to approval by the stockholders of the
Company. The Program shall terminate upon the earlier of (i) the date on which
all Common Stock available under this Program have been issued pursuant to the
exercise of stock options, (ii) the tenth anniversary of the effective date, or
(iii) the termination of this Program by the Committee subject to approval of
the Board of Directors of the Company. No Stock Option may be granted after the
termination of the Program. Any outstanding Stock Options as of the date the
Program terminates shall remain in full force and effect, subject to the terms
of the Program and the relevant Agreement relating to such Stock Option.
14. Indemnification
Each person who is or shall have been a member of the Committee, or of the Board
of Directors, shall be indemnified and held harmless by the Company from and
against any loss, cost, liability or expense that may be imposed upon or
reasonably incurred by such person in connection with or resulting from any
claim, action, suit or proceeding to which such person may be a party or in
which such person may be involved by reason of any action taken or failure to
act under the Program and against and from any and all amounts paid by such
person in settlement thereof with the Company's approval, or paid by such person
in satisfaction of any judgment in any such action, suit or proceeding against
such person, provided such person shall give the Company an opportunity, at its
own expense, to handle and defend the same before such person undertakes to
handle and defend it on such person's own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled from the Company, as a matter of law, or
otherwise.
15. Successors
All obligations of the Company under the Program, with respect to any Stock
Options granted hereunder, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger consolidation or otherwise, of all or substantially all of the
business and/or assets of the Company.
9
16. Severability
In the event any provision of the Program shall be held illegal or invalid for
any reason, such illegality or invalidity shall not affect the remaining parts
of the Program, and the Program shall be construed and enforced as if the
illegal or invalid provision had not been included.
17. Governing Law
This Program and any grant of Stock Options made and any action taken hereunder
shall be subject to and construed and interpreted in accordance with the laws of
the State of Delaware, without giving effect to principles of conflict of laws.
10
VISHAY INTERTECHNOLOGY, INC.
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Felix Zandman and Richard N. Grubb, or
if only one is present, then that individual, with full power of substitution,
to vote all shares of VISHAY INTERTECHNOLOGY, INC. (the "Company"), which the
undersigned is entitled to vote at the Company's Annual Meeting to be held at
The Four Seasons Hotel, Ballroom, Lobby Level, One Logan Square, Philadelphia,
Pennsylvania 19103, on the 21st day of May, 1998 at 10:30 a.m. Philadelphia
time, and at any adjournment thereof, hereby ratifying all that said proxies or
their substitutes may do by virtue hereof, and the undersigned authorizes and
instructs said proxies to vote as follows:
1. ELECTION OF DIRECTORS: To elect the nominees for Director below
for a term of one year;
FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW) TO VOTE FOR ALL NOMINEES LISTED BELOW
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Felix Zandman, Avi D. Eden, Donald G. Alfson, Robert A. Freece, Richard N.
Grubb, Eliyahu Hurvitz, Abraham Inbar, Gerald Paul, Edward B. Shils,
Luella B. Slaner, Mark I. Solomon, Jean-Claude Tine
2. ADOPTION OF 1997 STOCK OPTION PROGRAM: To approve the Company's
1997 Stock Option Program;
FOR AGAINST ABSTAIN
3. ADOPTION OF 1998 EMPLOYEE STOCK OPTION PROGRAM: To approve the
Company's 1998 Employee Stock
Option Program;
FOR AGAINST ABSTAIN
4. APPROVAL OF AUDITORS: To approve the appointment of
Ernst & Young LLP as auditors of
the Company for the fiscal year
ended December 31, 1998;
FOR AGAINST ABSTAIN
and in their discretion, upon any other matters that may properly come
before the meeting or any adjournments thereof.
(Continued and to be dated and signed on the other side.)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2, 3 and
4.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
Receipt of the Notice of Annual Meeting and of the Proxy Statement and
Annual Report of the Company accompanying the same is hereby acknowledged.
Dated: , 1998
(Signature of Stockholder)
(Signature of Stockholder)
Your signature should appear the
same as your name appears
herein. If signing as attorney,
executor, administrator, trustee
or guardian, please indicate the
capacity in which signing. When
signing as joint tenants, all
parties to the joint tenancy
must sign. When the proxy is
given by a corporation, it
should be signed by an
authorized officer.