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:
|X| Preliminary proxy statement |_| Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
|_| 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 6, 1999
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VISHAY INTERTECHNOLOGY, INC.
63 LINCOLN HIGHWAY
MALVERN, PENNSYLVANIA 19355-2120
April 19, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Vishay Intertechnology, Inc. to be held at 10:30 a.m. Philadelphia time on
the 20th day of May, 1999, 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 you will be asked to elect ten Directors; to
approve a proposed amendment to the Company's Amended and Restated Certificate
of Incorporation increasing the total number of authorized shares of all classes
of stock of the Company from 91,000,000 to 171,000,000 shares; to reapprove the
Company's existing performance-based compensation plan for its Chief Executive
Officer; and to ratify the appointment of Ernst & Young LLP as auditors for
Vishay's next audited fiscal year.
The Board of Directors unanimously recommends that you vote FOR the
election of all ten nominees as directors; FOR the amendment to the Company's
Amended and Restated Certificate of Incorporation; FOR the reapproval of the
Company's existing performance-based compensation plan for its Chief Executive
Officer; and FOR the ratification 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 20, 1999
Notice is hereby given that the Annual Meeting of Stockholders of
Vishay Intertechnology, Inc. will be held at The Four Seasons Hotel, Ballroom,
Lobby Level, One Logan Square, Philadelphia, Pennsylvania 19103, on the 20th day
of May, 1999 at 10:30 a.m. Philadelphia time, for the following purposes:
1. to elect ten directors for a term of one year and until their
successors are elected and qualified;
2. to approve a proposed amendment to the Company's Amended and
Restated Certificate of Incorporation to increase the total
number of authorized shares of all classes of stock of the
Company from 91,000,000 to 171,000,000;
3. to reapprove the Company's existing performance-based
compensation plan for its Chief Executive Officer; and
4. to ratify the appointment of auditors for Vishay's next audited
fiscal year.
Action will also be taken upon such other business, if any, as may
properly come before the meeting.
The stockholders of record at the close of business on April 1, 1999
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 19, 1999
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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. for use at the Annual Meeting of Stockholders to be held
at The Four Seasons Hotel, Ballroom, Lobby Level, One Logan Square,
Philadelphia, Pennsylvania 19103, on the 20th day of May, 1999, at 10:30 a.m.
Philadelphia time, and any adjournments thereof. Stockholders of record at the
close of business on April 1, 1999 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 Vishay's stockholders during ordinary business
hours for a period of ten days prior to the annual meeting at Vishay's offices,
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 Vishay. The Board
of Directors may use the services of Vishay'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 Vishay 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 proposed
amendment to the Company's Amended and Restated Certificate of Incorporation;
with respect to the reapproval of the Company's performance-based compensation
plan for its Chief Executive Officer; and with respect to the ratification of
the appointment of Ernst & Young LLP as independent auditors of Vishay, OR, if
no direction is indicated, will be voted FOR the election as directors of the
nominees listed below; FOR the proposed amendment to the Company's Amended and
Restated Certificate of Incorporation; FOR the reapproval of the Company's
existing performance-based compensation plan for its Chief Executive Officer;
and FOR the appointment of Ernst & Young LLP as 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 Vishay, by delivering to
Vishay 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 Vishay's Annual
Report to Stockholders for the fiscal year ended December 31, 1998. This proxy
statement and the enclosed form of proxy are being furnished commencing on or
about April 19, 1999.
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 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
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<PAGE>
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 proposed amendment to the Company's Amended and
Restated Certificate of Incorporation requires the approval of a majority of the
outstanding stock entitled to vote thereon. Reapproval of the Company's existing
performance-based compensation plan for its Chief Executive Officer requires
approval of a majority of the outstanding stock entitled to vote thereon.
Ratification of appointment of the auditors requires 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.
Vishay 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 Vishay's shares and intend to vote FOR the election of
the ten nominees as directors; FOR the proposed amendment to the Company's
Amended and Restated Certificate of Incorporation; FOR the reapproval of the
Company's existing performance-based compensation plan for its Chief Executive
Officer; and FOR the ratification of the appointment of the auditors. Such
shares are sufficient to approve each proposal regardless of how the other
shares are voted.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
On April 1, 1999, Vishay had outstanding 59,364,433 shares of Common
Stock, par value $.10 per share, each of which entitles the holder to one vote,
and 8,321,654 shares of Class B Common Stock, par value $.10 per share, each of
which entitles the holder to ten votes. Voting is not cumulative.
The following table provides certain information, as of April 1, 1999,
as to the beneficial ownership of the Common Stock or the Class B Stock of
Vishay for (a) each director and nominee, (b) each executive officer named in
the Summary Compensation Table, (c) the directors and executive officers of
Vishay as a group and (d) any person owning more than 5% of the Common Stock.
<TABLE>
<CAPTION>
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
- ---- --------- -------- --------- -------- -----
<S> <C> <C> <C> <C> <C>
Felix Zandman(1)(2) 619 * 4,651,476 55.9% 45.8%
Avi D. Eden(1)(2) 45,883 * -- -- *
Robert A. Freece(1) 67,486 * -- -- *
Richard N. Grubb(1) 40,625 * -- -- *
Eliyahu Hurvitz(1) 4,530 * -- -- *
Gerald Paul(1) 40,669 * -- -- *
Edward B. Shils(1) 42,030 * -- -- *
Luella B. Slaner(1)(3) 1,590,923 2.7% 1,731,702 20.8% 13.3%
Mark I. Solomon(1) 6,961 * -- -- *
Jean-Claude Tine(1) 6,766 * -- -- *
All Directors and
Executive Officers as
a group (13 persons) 1,939,645 3.3% 6,383,178 76.7% 59.3%
</TABLE>
- ------------
* 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 1,501,778 shares of Class B Stock held in various
trusts for the benefit of Mrs. Luella Slaner's children and grandchildren
and 370,440 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 1,872,218 shares of Class B stock over which Dr.
Zandman has sole voting control. Dr. Zandman and Mr. Eden disclaim
beneficial ownership of such shares of Class B Stock.
(3) Includes 585,054 shares of Common Stock and 381,642 shares of Class B Stock
directly owned by Mrs. Slaner, and 1,005,869 shares of Common Stock and
1,350,060 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
1,501,778 shares
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of Class B Stock held in various trusts for the benefit of her children and
grandchildren, for which she disclaims beneficial ownership.
PROPOSAL 1--ELECTION OF DIRECTORS
It is proposed to elect a board of ten directors for the following year
and until their successors are elected and qualified. Although the Company's
By-laws provide for up to twelve Directors, the Board has determined that it is
in the Company's best interest for no more than ten Directors to serve at this
time in order to give the Board of Directors flexibility to appoint additional
Directors if the need arises. Accordingly, proxies may not be voted for a
greater number of nominees named. All of the nominees set forth in the table
below 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 ten 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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF ALL TEN NOMINEES AS DIRECTORS.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
The following table 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.
<TABLE>
<CAPTION>
Year
First
Principal Occupation Elected
Name Age and Other Directorships Director
- ---- --- ----------------------- --------
<S> <C> <C> <C>
Felix Zandman(1) 70 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) 51 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.
Robert A. Freece(1) 58 Senior Vice President of the Company 1972
since May 1994. Vice President of the Company from 1972
until May 1994.
Richard N. Grubb(1) 52 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.
7
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Eliyahu Hurvitz 66 President and Chief Executive Officer, 1994
Teva Pharmaceutical Industries Ltd. for more
than the past five years.
Gerald Paul(1) 50 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) 83 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 79 Investor for more than the past five 1989
years.
Mark I. Solomon(2)(3)(4)(5) 59 Chairman of CMS Companies for more than 1993
the past five years.
Jean-Claude Tine 80 Investor for more than the past five 1988
</TABLE>
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.
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 and April of 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 and Meetings of the Board of Directors
The Board of Directors met four times during the twelve months ended
December 31, 1998. The Executive Committee met twice 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.
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The Audit Committee met twice during the twelve months ended December
31, 1998. 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
Vishay's systems of internal accounting controls.
The Employee Stock Plan Committee met once during the twelve months
ended December 31, 1998. 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, 1998. 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, the 1997 Stock Option Program and the 1998 Stock
Option Program (the "Stock Option Programs"), met once during the twelve months
ended December 31, 1998.
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, except for Mr. Hurvitz and Mrs.
Slaner, who each attended 50% of the meetings of the Board.
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
On December 15, 1998, Eliyahu Hurvitz, President and Chief Executive
Officer of Teva Pharmaceutical Industries Ltd. ("Teva") and a member of the
Board of Directors of the Company, was convicted by the District Court of
Jerusalem of assisting a third party in avoiding the payment of income taxes
relating to Promedico Ltd. ("Promedico"), a former subsidiary of Teva. On
January 14, 1999, Mr. Hurvitz was sentenced to pay a fine of 700,000 NIS
(US$173,000, as of April 5, 1999) and also received a suspended sentence of 18
months. Mr. Hurvitz is currently appealing the decision in Israel's Supreme
Court. A decision on the appeal is anticipated within approximately one year of
its filing. Mr. Hurvitz served during the period in which Promedico was owned by
Teva (1980-1986) as the chairman of Promedico. 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 integrity and ability to
continue managing Teva.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and persons who
beneficially own more than ten percent of the Company's Common Stock to report
their ownership of and transactions in the Company's Common Stock to the
Securities and Exchange Commission (the "Commission") and The New York Stock
Exchange. Copies of these reports are also required to be supplied to the
Company. The Company believes, based solely on a review of the copies of such
reports received by the Company, that during 1998 all applicable Section 16(a)
reporting requirements were complied with.
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Executive Compensation
The following table sets forth all compensation for the fiscal years
ended December 31, 1998, 1997 and 1996 awarded or paid to the Chief Executive
Officer and the individuals who, in fiscal 1998, were the other four highest
paid executive officers of the Company (collectively,the "Named Executive
Officers").
<TABLE>
<CAPTION>
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
- --------------- ---- ------ -------- ------------ ---- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Felix Zandman 1998 $975,000 $ 339,000 (3) None 27,000 None $3,200(4)
Chairman of the Board, 1997 $722,500 $ 0 (3) None 556,500 None $3,200(4)
and Chief Executive 1996 $850,000 $1,000,000 (3) None None None $3,000(4)
Officer
Avi D. Eden(5) 1998 $280,000 $ 120,000 (3) $86,000 18,000 None $3,200(4)
Vice Chairman of 1997 $220,000 $ 0 (3) $96,000 141,750 None $3,200(4)
the Board and 1996 $190,000 $ 133,000 (3) $28,000 None None None
Executive Vice President
Richard N. Grubb(6) 1998 $280,000 $ 120,000 (3) $86,000 18,000 None $3,200(4)
Director, Executive 1997 $220,000 $ 0 (3) $96,000 141,750 None $3,200(4)
Vice President, Treasurer 1996 $190,000 $ 133,000 (3) $28,000 None None $3,000(4)
and Chief Financial Officer
Gerald Paul(7)(8) 1998 $430,000 $ 150,000 (3) $86,000 18,000 None None
Director, Chief Operating 1997 $357,000 $ 0 (3) $96,000 141,750 None None
Officer and President 1996 $312,000 $ 126,000 (3) $28,000 None None None
King Owyang(9) 1998 $355,386 $ 221,892 $ 167,087(10) None 12,000 $123,300 $ 11,099
President and Chief 1997 $332,316 $ 449,919 $ 286,411(11) None None $ 82,500 $ 23,474
Executive Officer of 1996 $324,011 $ 173,895 $ 171,172(12) None None $ 76,200 $ 18,884
Siliconix
</TABLE>
- ------------------------
(1) Bonuses paid in any calendar year are based, in part, 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 Named Executive Officers.
(2) Dividends accumulate on the restricted stock awards but are paid only upon
the vesting of such awards.
(3) Vishay has concluded that the aggregate amount of perquisites and other
personal benefits paid in such period did not exceed the lesser of 10% of
such officer's total annual salary and bonus for each of 1998, 1997 and
1996, respectively, or $50,000. Such perquisites have not been included in
the table.
(4) Represents amounts contributed in 1998, 1997, and 1996 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. Moreover, Mr. Eden held an aggregate of
14,630 shares of restricted stock with a value of $212,130 at December 31,
1998.
(6) Mr. Grubb held an aggregate of 12,487 shares of restricted stock with a
value of $181,056 at December 31, 1998.
(7) Amounts are paid in foreign currency and converted into U.S. dollars at the
weighted average exchange rate for each 12-month period.
(8) Dr. Paul held an aggregate of 11,634 shares of restricted stock with a
value of $168,693 at December 31, 1998.
(9) Dr. Owyang became President and Chief Executive Officer of Siliconix, a
subsidiary of the Company, in March 1998.
(10) This amount includes $161,575 of forgiven real estate loans and $5,512 paid
for reimbursement attributable to certain employee benefits received in
1998.
(11) This amount includes $180,000 of forgiven real estate loans and $97,801
paid for reimbursement of income taxes attributable to certain employee
benefits received in 1997.
(12) This amount includes $50,364 paid for reimbursement of income taxes
attributable to certain employee benefits received in 1996 and $80,000 of
forgiven real estate loans.
10
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Retirement Plans
Vishay maintains a nonqualified defined benefit retirement plan for
certain highly compensated employees in the United States. Mr. Grubb and Mr.
Eden are the only executive officers named in the Summary Compensation Table to
participate in the plan. Messrs. Grubb and Eden elected to participate in the
plan as of July 1, 1995 and July 1, 1997, respectively. During 1998, Messrs.
Grubb and Eden deferred compensation of $6,950, respectively under the plan.
Additionally, Vishay accrued an aggregate liability of $15,060 for Messrs. Grubb
and Eden. The estimated annual benefit payable upon Messrs. Grubb'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 1998 and
(iii) make all mandatory contributions under the plan,
would be $63,703 for Mr. Grubb 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 ($13,602). The estimated annual benefit payable upon Dr. Paul's
retirement at age 65 is DM 16,667 ($9,446). 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, 1998, Dr. Paul
had 21 years of service.
<TABLE>
<CAPTION>
Pensionable Years of Service of
Final Average Compensation 10 15 20 25 30 35
-- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C>
100% of pensionable income in 1998 $ 59,548 $ 71,461 $ 83,374 $ 95,279 $110,454 $128,047
110% of pensionable income in 1998 $ 65,503 $ 78,607 $ 91,711 $104,807 $121,500 $140,852
120% of pensionable income in 1998 $ 71,458 $ 85,753 $100,048 $114,335 $132,545 $153,656
150% of pensionable income in 1998 $ 89,326 $107,192 $125,057 $142,922 $165,686 $192,075
200% of pensionable income in 1998 $119,104 $142,922 $166,747 $190,565 $220,917 $256,104
</TABLE>
All U.S. dollar amounts relating to Dr. Paul's benefits under the German defined
benefit pension plan, including those listed on the foregoing chart, have been
converted at the weighted average exchange rate for the 12 months ended December
31, 1998.
11
<PAGE>
Stock Options
The following table sets forth certain information regarding stock
options granted to the Named Executive Officers during the Company's 1995 fiscal
year.
<TABLE>
<CAPTION>
Option Grants in Fiscal Year 1998(1)
Potential Realizable
Value at Assumed Annual
Approximate % of Rates of Stock Price
Securities Total Options Exercise Appreciation for
Underlying Granted to Price Option Term (3)
Options Employees in Fiscal Per Expiration
Name Granted(2) Year Share(2) Date 5% 10%
- ------------------------------------------------------------------------------------------------------------------------------
1997 STOCK OPTION PROGRAM
<S> <C> <C> <C> <C> <C> <C> <C>
Felix Zandman....... 185,500 12.14% $20.42 6/1/08 $2,381,820 $6,036,170
185,500 12.14% $23.48 6/1/08 1,814,190 5,468,540
185,500 12.14% $25.52 6/1/08 1,435,770 5,090,120
Avi D. Eden......... 47,250 3.09% $20.42 6/1/08 606,690 1,537,515
47,250 3.09% $23.48 6/1/08 462,105 1,392,930
47,250 3.09% $25.52 6/1/08 365,715 1,296,540
Richard N. Grubb.... 47,250 3.09% $20.42 6/1/08 606,690 1,537,515
47,250 3.09% $23.48 6/1/08 462,105 1,392,930
47,250 3.09% $25.52 6/1/08 365,715 1,296,540
Gerald Paul......... 47,250 3.09% $20.42 6/1/08 606,690 1,537,515
47,250 3.09% $23.48 6/1/08 462,105 1,392,930
47,250 3.09% $25.52 6/1/08 365,715 1,296,540
1998 STOCK OPTION PROGRAM
Felix Zandman....... 27,000 3.17% $10.50 3/16/08 178,200 452,250
Avi D. Eden......... 18,000 2.11% $10.50 3/16/08 118,800 301,500
Richard N. Grubb.... 18,000 2.11% $10.50 3/16/08 118,800 301,500
Gerald Paul......... 18,000 2.11% $10.50 3/16/08 118,800 301,500
King Owyang......... 12,000 1.41% $10.50 3/16/08 79,200 201,000
</TABLE>
- ---------------------
(1) Each Named Executive Officer listed in the table received (i) a grant of
three options on November 13, 1997, each at a different exercise price,
pursuant to the Company's 1997 Stock Option Program and (ii) a grant of
options on October 6, 1998, at an exercise price of 100% of the fair market
value on the date of such grant, pursuant to the Company's 1998 Stock
Option Program. Both plans were approved by the stockholders on May 21,
1998. The key terms of each option are described below.
(2) Adjusted for 5% stock dividend on June 11, 1998.
(3) For the 1997 Stock Option Program, the assumed annual rates of appreciation
of 5% and 10% would result in the price of the Company's stock increasing
to $33.26 and $52.96, respectively. For the 1998 Stock Option Program, the
assumed annual rates of appreciation of 5% and 10% would result in the
price of the Company's stock increasing to $17.10 and $27.25, respectively.
No stock options were exercised by any of the executive officers named
in the Summary Compensation Table during the Company's 1998 fiscal year.
Each of the tables below sets forth certain 1998 fiscal year-end
information regarding the exercise of stock options granted pursuant to the 1995
Stock Option Program, 1997 Stock Option Program and 1998 Stock Option Program to
the Named Executive Officers and the 1998 fiscal year-end value of unexercised
options, provided on an aggregated basis.
12
<PAGE>
The officers listed in the two tables below received grants of (i)
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; and (ii) three options on November 13, 1997, each at a different exercise
price, pursuant to the Company's 1997 Stock Option Program approved by the
stockholders on May 21, 1998. The options are fully vested. 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.
<TABLE>
<CAPTION>
1995 Stock Option Program
Aggregated Option Exercises in Fiscal 1998 and
1998 Fiscal Year-End Option Values
Number of Securities
Underlying Value of Unexercised
Shares Unexercised Options at In-the-Money Options
Acquired 1998 Fiscal Year-End(1) at Fiscal Year-End
on Value Exer- Unexer- Exer- Unexer-
Name Exercise Realized cisable cisable cisable cisable
- ---- -------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Felix Zandman (2) -- 583,443 -- $0 --
Avi D. Eden (2) -- 145,861 -- $0 --
Richard N. Grubb (2) -- 145,861 -- $0 --
Gerald Paul (2) -- 145,861 -- $0 --
- ---------------
(1) Adjusted for 5% stock dividend paid on June 11, 1998.
(2) No stock options were exercised by any of the Named Executive Officers
during the Company's 1998 fiscal year.
1997 Stock Option Program
Aggregated Option Exercises in Fiscal 1998 and
1998 Fiscal Year-End Option Values
Number of Securities
Underlying Value of Unexercised
Shares Unexercised Options at In-the-Money Options
Acquired 1998 Fiscal Year-End(1) at Fiscal Year-End
on Value Exer- Unexer- Exer- Unexer-
Name Exercise Realized cisable cisable cisable cisable
- ---- -------- -------- ------- ------- ------- -------
Felix Zandman (2) -- 556,500 -- $0 --
Avi D. Eden (2) -- 141,750 -- $0 --
Richard N. Grubb (2) -- 141,750 -- $0 --
Gerald Paul (2) -- 141,750 -- $0 --
</TABLE>
- ---------------
(1) Adjusted for 5% stock dividend paid on June 11, 1998.
(2) No stock options were exercised by any of the Named Executive Officers
during the Company's 1998 fiscal year.
The officers listed in the table below received grants of stock options
on October 6, 1998, at an exercise price of 100% of the fair market value on the
date of such grant, pursuant to the Company's 1998 Stock Option Program approved
by the stockholders on May 21, 1998. The options have a vesting schedule whereby
one-sixth of the options granted vest each year for six consecutive years. The
right to exercise any vested option expires no later than ten years from the
date the option is granted. All of a recipient's options that have not yet been
exercised will terminate upon termination for cause. If a recipient leaves the
Company for any reason other than for cause, death, disability or retirement,
the recipient's options will generally be exercisable for 60 days after
termination,
13
<PAGE>
provided the recipient adheres to a non-competition agreement. 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 fails to comply with a non-competition agreement, his options
expire and terminate immediately. Any of these foregoing provisions, however,
may be waived at the discretion of the Stock Option Committee.
<TABLE>
<CAPTION>
1998 Stock Option Program
Aggregated Option Exercises in Fiscal 1998 and
1998 Fiscal Year-End Option Values
Number of Securities
Underlying Value of Unexercised
Shares Unexercised Options at In-the-Money Options
Acquired 1998 Fiscal Year-End at Fiscal Year-End
on Value Exer- Unexer- Exer- Unexer-
Name Exercise Realized cisable cisable cisable cisable
- ---- -------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Felix Zandman (1) -- -- 27,000 -- $0
Avi D. Eden (1) -- -- 18,000 -- $0
Richard N. Grubb (1) -- -- 18,000 -- $0
Gerald Paul (1) -- -- 18,000 -- $0
King Owyang (1) -- -- 12,000 -- $0
</TABLE>
- ---------------
(1) No stock options were exercised by any of the Named Executive Officers
during the Company's 1998 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.
Vishay'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 Vishay's business objectives, while
motivating management to lead Vishay to meet or exceed annual performance goals,
thereby enhancing stockholder value.
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 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.
During August 1998, the Company established a "Stock Purchase Plan for
Corporate Officers" which will enable certain executive corporate officers
(except Dr. Zandman) to be eligible for interest-bearing loans from the Company
to be used solely for open-market purchases of Vishay Common Stock in accordance
with the rules and regulations of the Commission. Under this plan, the Company
loaned each of Messrs. Eden, Grubb, Paul, Spires, Freece and Abraham Inbar
$120,000 to enable each to purchase 10,000 shares of Common Stock at a price of
$12.00 per share.
14
<PAGE>
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:
(1) the Company's financial performance in view of the performance of
companies similar in size and character,
(2) the compensation of officers of companies similar in size and
character, including some of the companies listed as peer group
companies,
(3) Dr. Zandman's 36 years of dedication and service to the Company
from the date of its incorporation and
(4) the Company's financial performance in comparison to previous
years.
For 1999, Dr. Zandman's base salary will be $975,000.
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 net income before special
or unusual charges of the Company. The Compensation Committee has focused in
recent years particularly on the net income before special or unusual charges of
the Company because the Committee believes this to be a strong gauge of the
growth and success of the Company. Dr. Zandman received a $267,867 bonus for the
Company's 1998 performance based upon a pre-approved formula and achievement of
certain project goals.
Under the formula approved by the Compensation Committee for 1999, Dr.
Zandman will be awarded a cash performance bonus if the Company achieves net
income before special or unusual charges above a base of $42 million. The bonus
will be a cash amount equal to 3% of net income before special or unusual
charges above $42 million. The Compensation Committee set these net income
before special or unusual charges 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 a certain level of net income before special or unusual charges. This
formula may only be adjusted or waived by the Board of Directors upon
recommendation of the Compensation Committee following each fiscal year. In
addition, from time to time, the Board of Directors may devise a project, the
goal of which, if achieved, would entitled the Chief Executive Officer to an
additional bonus.
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, 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 if doing so would be in the best interests of Vishay 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
15
<PAGE>
annually to these individuals. The performance bonus is primarily based upon the
net income before special or unusual charges of Vishay as a whole or, for some
executives, the operating profits of Vishay or of the relevant division of
Vishay 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 1999, certain of the key management will be entitled to
performance bonuses equal to 0.4% of net income before special or unusual
charges above a base of $42 million. Any bonus awarded may be granted in cash
and/or in Common Stock of Vishay, in addition to Common Stock available through
the 1997 Stock Option Program and 1998 Employee Stock Option Program. 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 net income before
special or unusual charges of Vishay 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 net income before special or unusual charges 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 Agreement
On March 15, 1985, Vishay 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. After that period, the employment agreement has been extended for
one-year periods on an annual basis. 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 Vishay, Dr. Zandman will be entitled
to a royalty from the date of such termination or breach to the later to occur
of (1) the tenth anniversary of such date; or (2) Dr. Zandman's 75th birthday.
The amount of such royalty, based on the gross sales by Vishay 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 Vishay that
incorporate Dr. Zandman's inventions after the date of the agreement.
16
<PAGE>
STOCK PERFORMANCE GRAPH
The line graph below compares the cumulative total shareholder return
on Vishay'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 reinvested at December 31, 1993 and assumes
that all dividends were reinvested.
[Graphic omitted]
<TABLE>
<CAPTION>
INDEXED RETURNS
Base
Period
Company Name/Index Dec93 Dec94 Dec95 Dec96 Dec97 Dec98
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
VISHAY INTERTECHNOLOGY 100 146.47 197.74 153.24 163.07 105.37
S&P 500 INDEX 100 101.32 139.40 171.40 228.59 293.91
PEER GROUP 100 136.92 163.85 167.46 174.36 233.44
</TABLE>
- ------------
(1) Advanced Micro Devices, Inc., Alpha Industries Inc., 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.
17
<PAGE>
PROPOSAL 2--AMENDMENT OF COMPANY'S AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION
It is proposed that the Company's Amended and Restated Certificate of
Incorporation be amended to increase the total number of authorized shares of
all classes of stock of the Company from 91,000,000 to 171,000,000. More
specifically, it is proposed that the number of Common Stock, $.10 par value,
which the Company is authorized to issue, be increased from 75,000,000 shares to
150,000,000 shares and the number of Class B Common Stock, $.10 par value, which
the Company is authorized to issue, be increased from 15,000,000 to 20,000,000
shares (together, the "Common Stock Amendment"). Neither the holders of Common
Stock nor the holders of Class B Stock have any preemptive rights to subscribe
for additional shares of capital stock of the Company.
The text of the resolution which is proposed to be approved is:
RESOLVED, that the first paragraph of Article FOURTH of the Amended and
Restated Certificate of Incorporation of the Company be amended to read as
follows:
FOURTH: Section 1. Classes and Number of Shares. The total number
of shares of all classes of stock which the Corporation shall have
authority to issue is 171,000,000 shares. The classes and the
aggregate number of shares of stock of each class which the
Corporation shall have authority to issue are as follows:
(i) 150,000,000 shares of Common Stock, $0.10 par value
share (hereinafter the "Common Stock");
(ii) 20,000,000 shares of Class B Common Stock, $0.10 par
value per share (hereinafter the "Class B Stock"); and
(iii) 1,000,000 shares of Preferred Stock, $1.00 par value
per share, with such rights, privileges, restrictions and
preferences as the Board of Directors may authorize from time to
time (hereinafter the "Preferred Stock").
The Company at present has authorized capital stock consisting of
75,000,000 shares of Common Stock, $.10 par value per share, 15,000,000 shares
of Class B Stock, $.10 par value per share, and 1,000,000 shares of Preferred
Stock, $1.00 par value per share. On April 1, 1999, 59,364,433 shares of Common
Stock, 8,321,654 shares of Class B Stock and no shares of Preferred Stock were
outstanding.
During 1995, the Company declared and paid a 5% stock dividend which
resulted in the issuance of 1,078,196 shares of Common Stock and 176,955 shares
of Class B Stock. During 1996, the Company declared and paid a 5% stock dividend
which resulted in the issuance of 2,558,068 shares of Common Stock and 361,101
shares of Class B Stock. During 1997, the Company declared and paid a 5% stock
dividend which resulted in the issuance of 2,687,690 shares of Common Stock and
378,186 shares of Class B Stock. During 1998, the Company declared and paid a 5%
stock dividend which resulted in the issuance of 2,824,700 shares of Common
Stock and 396,269 shares of Class B Stock.
As a result of these issuances of Common Stock and Class B Common
Stock, the number of authorized, non-reserved shares of Common Stock and Class B
Common Stock available for issuance by the Company in the future has been
greatly reduced. Hence, much of the flexibility with respect to possible future
stock splits, equity financings, stock-for-stock acquisitions, stock dividends
or other transactions that involve the issuance of Common Stock and Class B
Common Stock of the Company has been lost. The proposed amendment to increase
the number of authorized shares of Common Stock and Class B Common Stock, if
adopted, will preserve the Company's ability to take such actions. The Company
has no other current plans or proposals for the issuance of additional shares of
Common Stock or Class B Common Stock. Subject to compliance with applicable laws
and regulations, the Board of Directors in most instances could authorize the
issuance of all or part of such shares at any time for any
18
<PAGE>
proper corporate purpose without further stockholder action, although certain
large issuances of shares may require stockholder approval to maintain the
listing of the Common Stock under New York Stock Exchange listing provisions.
If the Common Stock Amendment is adopted by the Company's stockholders,
such amendment will become effective on the date a certificate of amendment is
filed in Delaware, the Company's state of incorporation. It is anticipated that
such filing will occur on or about May 28, 1999.
The proposed amendment will not in any way affect the 1,000,000 shares
of Preferred Stock that the Company is authorized to issue under its existing
Amended and Restated Certificate of Incorporation with such rights and
preferences as may be determined by the Board of Directors of the Company.
Although the Company does not presently intend to issue shares of Preferred
Stock, if such stock were issued, the terms could include provisions which could
have anti-takeover effect.
The availability for issuance of the additional shares of Common Stock
and Class B Common Stock, and any respective issuance thereof, or both, could
render more difficult or discourage an attempt to obtain control of the Company
by means of a tender offer or proxy contest directed at the Company. Thus, the
amendment could be characterized as having an anti-takeover effect.
In addition, the Company's existing Amended and Restated Certificate of
Incorporation also includes certain other provisions (although no action is
being taken with respect thereto), which could be characterized as having an
anti-takeover effect, specifically the terms and provisions of Class B Stock.
Holders of Common Stock are entitled to one vote for each share held.
Holders of Class B Stock are entitled to ten votes for each share held. Since
the Class B Stock carries additional voting rights, the holders of Class B Stock
will be able to cause the election of the Directors of the Company regardless of
how the holders of the Common Stock vote. The existence of the Class B Stock may
make the Company less attractive as a target for a takeover proposal and may
render more difficult or discourage a merger proposal, proxy contest or the
removal of the incumbent directors, even if such actions were favored by the
stockholders of the Company other than the Class B stockholders. Accordingly,
the existence of the Class B Stock may deprive the holders of Common Stock of an
opportunity they might otherwise have to sell their shares at a premium over the
prevailing market price in connection with a merger or acquisition. The Common
Stock and the Class B Stock vote together as one class on all matters subject to
stockholder approval, except that the approval of the holders of Common Stock
and of Class B Stock each voting separately as a class, is required to authorize
issuances of additional shares of Class B Stock other than in connection with
stock splits and stock dividends. Under Delaware law and the Company's Amended
and Restated Certificate of Incorporation, the approval by a majority of the
votes of the outstanding shares of stock of the Company entitled to vote is
required in order to consummate certain major corporation transactions, such as
a merger or a sale of substantially all assets of the Company. Dr. Felix Zandman
and the Voting Trust Agreement currently hold a sufficient number of shares of
Class B Stock to enable them to approve or disapprove such a transaction
regardless of how shares of Common Stock are voted.
Holders of Common Stock and Class B Stock are entitled to receive, and
share ratably on a per share basis in, dividends and other distributions in
cash, stock or property of the Company as may be declared by the Board of
Directors from time to time out of assets or funds legally available therefor,
and in distributions upon liquidation of the Company. In the event of a stock
dividend or stock split, holders of Common Stock will receive shares of Common
Stock and holders of Class B Stock will receive shares of Class B Stock. Neither
the Common Stock nor the Class B Stock will be split, divided or combined unless
the other is split, divided or combined equally and no shares of Common Stock
will be paid as a dividend in the same ration on the outstanding shares of Class
B Stock.
Shares of Class B Stock are convertible into shares of Common Stock on
a one-to-one basis at any time at the option of the holder thereof. The Class B
Stock is not transferable except to the holder's spouse, certain of such
holder's relatives, certain trusts established for their benefits, corporations
and partnerships beneficially owned and controlled by such holder, charitable
organizations and such holder's estate. Upon any transfer made in violation of
those restrictions, shares of Class B Stock will be automatically converted into
shares of Common Stock.
19
<PAGE>
In order for the proposal to amend the Amended and Restated Certificate
of Incorporation of the Company to increase the total number of authorized
shares of all classes of stock of the Company to be adopted, the affirmative
vote of the majority of the votes of the outstanding shares of Common Stock and
Class B Stock entitled to vote thereon at a meeting of stockholders, voting
together as a single class, is required. The shares represented by the proxies
solicited by the Board of Directors of the Company will be voted as instructed
on the form of proxy or, if no direction is indicated, will be voted "FOR" the
approval of the amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.
PROPOSAL 3-- REAPPROVAL OF SECTION 162(m) CASH BONUS PLAN
Background
On March 19, 1999, the Board of Directors (excluding Dr. Zandman who
was precluded from considering the plan) readopted, subject to stockholder
reapproval, the existing Section 162(m) Cash Bonus Plan, which is the separate
annual bonus plan for Dr. Zandman as described below, so as to continue to
qualify bonuses to him for 2000 and later years as "performance-based."
In order for bonuses to be so qualified, the tax regulations require
that the material terms of the Section 162(m) Cash Bonus Plan be approved by
stockholders every five years. This plan was last approved by stockholders of
the Company at the Company's 1994 annual meeting. Accordingly, there will be
presented at the annual meeting a proposal to reapprove the Company's existing
Section 162(m) Cash Bonus Plan under which the Compensation Committee will
annually set the performance goals and bonus opportunities applicable to the
Chief Executive Officer.
Material Plan Terms
Business Criteria upon which Performance Goals are Based.
The performance goals for the Chief Executive Officer will be linked to
net income before special, unusual or other charges of the Company. The annual
threshold level of net income before special, unusual or other charges for
receiving any performance-based bonus, the ranges of net income before special,
unusual or other charges above that base threshold and the percentage of net
income before special, unusual or other charges to be awarded within such ranges
will be determined by the Compensation Committee prior to the start of each
fiscal year unless applicable regulations permit determinations at a later date.
The thresholds established by the Compensation Committee and adopted by the
Board for 1999 are described under "Compensation Committee and Employee Stock
Option Plan Committee Report on Executive Compensation."
Vote Required
The Section 162(m) Cash Bonus Plan will not be implemented if it is not
approved by the affirmative vote of the holders of a majority of the issued and
outstanding shares of Common Stock present in person or by proxy and voting
thereon at the Annual Meeting. Under the proposed regulations, if the 162(m)
Cash Bonus Plan is approved, it may remain in effect without further stockholder
approval until the annual meeting of stockholders in 2004, unless materially
amended prior to such meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE REAPPROVAL OF
THE COMPANY'S EXISTING SECTION 162(m) CASH BONUS PLAN.
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PROPOSAL 4--RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors recommends that the public accounting firm of
Ernst & Young LLP be appointed independent auditors of Vishay for its next
audited fiscal year ending December 31, 1999. Ernst & Young LLP have been
Vishay's auditors since 1968. Representatives of Ernst & Young LLP are expected
to be present at the annual meeting to respond to appropriate questions from
Vishay's stockholders and will have the opportunity to make a statement at the
annual meeting if they desire to do so.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF THE AUDITORS.
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 Vishay is hereby
incorporated by reference to Vishay's most recent Report on Form 10-K. Vishay
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 STOCKHOLDERS
The financial statements and the schedules thereto of Vishay are hereby
incorporated by reference to Vishay'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 BY STOCKHOLDERS
Any stockholder proposal intended to be presented at Vishay's 2000
annual meeting should be sent to Vishay at 63 Lincoln Highway, Malvern,
Pennsylvania 19355-2120 and must be received on or prior to January 19, 2000, to
be eligible for inclusion in Vishay's proxy statement and form of proxy to be
used in connection with the 2000 annual meeting.
William J. Spires
Secretary
April 19, 1999
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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 20th of May, 1999 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, Robert A. Freece, Richard N. Grubb, Eliyahu
Hurvitz, Gerald Paul, Edward B. Shils, Luella B. Slaner, Mark I. Solomon,
Jean-Claude Tine
2. APPROVAL OF AMENDMENT TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
INCREASING THE TOTAL NUMBER OF AUTHORIZED SHARES OF ALL CLASSES OF STOCK OF
THE COMPANY FROM 91,000,000 TO 171,000,000:
FOR AGAINST ABSTAIN
3. REAPPROVAL OF VISHAY'S EXISTING PERFORMANCE-BASED COMPENSATION PLAN FOR ITS
CHIEF EXECUTIVE OFFICER:
FOR AGAINST ABSTAIN
4. RATIFICATION OF AUDITORS: To ratify the appointment of
Ernst & Young LLP as auditors
of the Company for the fiscal
year ended December 31, 1999;
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.)
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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: , 1999
(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.
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