<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KA
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
[NO FEE REQUIRED]
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from _____________ to ___________
COMMISSION FILE NUMBER 0-3698
SILICONIX INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 94-1527868
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2201 LAURELWOOD ROAD
SANTA CLARA, CALIFORNIA 95054
(Address of principal executive offices)
(408) 988-8000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $0.01 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by nonaffiliates is
$52,500,000, based upon the closing price for the registrant's Common Stock
on April 21, 1998 ($27.00).
The number of shares of the registrant's Common Stock, $0.01 par value,
outstanding at April 21, 1998 was 9,959,680.
DOCUMENTS INCORPORATED BY REFERENCE--None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth the name, age and principal
occupation of each director of Siliconix, his or her business experience
during the past five years, and the year each was first elected a director of
the Company. None of the directors is employed by the Company.
<TABLE>
<CAPTION>
Nominee Age Business Experience During Past Five Years
------- --- ------------------------------------------
<S> <C> <C>
Everett Arndt 47 Operations Senior Vice President, North America
Administration of Vishay Intertechnology, Inc.,
the indirect holder of 80.4% of the Company's
outstanding Common Stock, since 1998; Vice
President, Controller of Vishay Intertechnology,
Inc. (1995-1998); Vice President and Controller of
Vitramon (affiliated with Vishay) (1987-1995);
director of Siliconix since March 1998.
Lori Lipcaman 40 Operations Senior Vice President and Controller of
Vishay Intertechnology, Inc. (since 1998); Vice
President and Controller of Vishay Europe GmbH
(1996-1998); Director of European Accounting of
Vishay Intertechnology, Inc. (1991-1996); Director
of Finance and Accounting of Sprague France
(affiliated with Vishay) (1993-1996); director of
Siliconix since March 1998.
Frank Maier 60 Member of the Board of Management of AEG
Aktiengesellschaft (since 1989) and President and
Chief Executive Officer of TEMIC TELEFUNKEN
microelectronic GmbH (since 1992); director of
Siliconix since 1988.
Glyndwr Smith 59 Assistant to the CEO and Staff Senior Vice
President of Vishay Intertechnology, Inc. (since
1991); director of Siliconix since March 1998.
</TABLE>
The following table sets forth the name, age and current position
with the Company of each executive officer of the Company and his business
experience during the past five years.
<TABLE>
<CAPTION>
Officer Age Business Experience During Past Five Years
------- --- ------------------------------------------
<S> <C> <C>
King Owyang 47 President and Chief Executive Officer of the
Company (since 1998); Executive Vice President,
Technology and Silicon Operations (1992-1998).
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Officer Age Business Experience During Past Five Years
------- --- ------------------------------------------
<S> <C> <C>
John Cox 49 Vice President, Worldwide Environmental, Health &
Safety Affairs (since 1997); also serves as
Executive Vice President and Principal Consultant
of EnviroBusiness, Inc., an environmental
consulting firm to high-technology industries,
specializing in semiconductor and semiconductor
equipment manufacturers (1995-1998); Corporate
Director of Safety, Health & Environmental Affairs
of Shipley Company (1983-1995).
</TABLE>
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Directors and executive officers are required to comply with
section 16 of the Securities Exchange Act of 1934, which requires generally
that such persons file reports on Form 4 with the Securities and Exchange
Commission on or before the tenth day of the month following any month in
which they engage in any transaction in the Company's Common Stock. King
Owyang filed one Form 4 late with respect to transactions that occurred in
the fiscal year ended December 31, 1997. The late Form 4 reflected two
transactions in the Company's Common Stock.
ITEM 11. EXECUTIVE COMPENSATION.
The following table shows, as to the Chief Executive Officer and
each of the four other most highly compensated executive officers whose
salary plus bonus for 1997 exceeded $100,000, information concerning
compensation paid for services to the Company in all capacities during the
fiscal year ended December 31, 1997, as well as the total compensation paid
to each such individual for the Company's previous two fiscal years (if such
person was the Chief Executive Officer or an executive officer, as the case
may be, during any part of such fiscal year).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
---------------------------------------------
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation LTIP Payouts Compensation(1)
- ------------------ ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard J. Kulle 1997 $563,921(2) $826,675 $362,727(3) $186,375 $23,474
President and Chief 1996 $400,456 $226,005 $195,198(4) $160,125 $18,884
Executive Officer 1995 $392,491(5) $198,907 $329,622(6) $180,125 $23,820
King Owyang 1997 $332,316 $449,919 $286,411(7) $ 82,500 $23,474
Executive Vice 1996 $324,011 $173,895 $171,172(8) $ 76,200 $18,884
President 1995 $283,067 $200,619 $172,206(9) $ 80,500 $22,818
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
---------------------------------------------
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation LTIP Payouts Compensation(1)
- ------------------ ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jurgen Biehn 1997 $262,338 $206,899 $ 89,322(10) $ 68,799 $18,674
Chief Financial 1996 $253,677 $169,739 $162,272(11) $ 66,210 $ 2,700
Officer 1995 $228,760 $176,514 $192,049(12) $ 73,550 $ 1,728
John Cox(13) 1997 $244,125 0 (14) 0 0
Vice President,
Worldwide Environmental
Health & Safety Affairs
G. Thomas Simmons 1997 $280,390 $435,286 $163,294(15) $ 67,500 $23,474
Vice President, 1996 $271,487 $146,526 $122,203(16) $ 50,625 $19,856
Marketing 1995 $243,881 $143,869 (14) $ 0 $22,547
</TABLE>
_____________________
(1)The Company does not have any stock option or stock purchase plans. All
Other Compensation includes Company contributions to the individuals'
respective Tax Deferred Savings Plan and Profit Sharing Plan accounts, and
payment by the Company of group term life insurance premiums on their behalf.
In 1997 these amounts were--Kulle: TDSP, $4,800; PSP, $17,288; insurance,
$1,386; Owyang: TDSP, $4,800; PSP, $17,288; insurance, $1,386; Biehn: PSP,
$17,288; insurance, $1,386; and Simmons: TDSP, $4,800; PSP, $17,288;
insurance, $1,386.
(2)This amount includes $132,958 of compensation for accrued but unused
vacation time.
(3)This amount includes $160,000 of forgiven real estate loans and $158,387
paid for reimbursement of income taxes for 1997.
(4)This amount includes $60,629 paid for reimbursement of income taxes for
1996.
(5)This amount includes $39,232 of compensation for accrued but unused
vacation time.
(6)This amount includes $90,000 of forgiven real estate loans and $199,958
paid for reimbursement of income taxes for 1995 and prior years.
(7)This amount includes $180,000 of forgiven real estate loans and $97,801
paid for reimbursement of income taxes for 1997.
(8)This amount includes $50,364 paid for reimbursement of income taxes for
1996 and $80,000 of forgiven real estate loans.
(9)This amount includes $62,000 of forgiven real estate loans and $95,663
paid for reimbursement of income taxes for 1995 and prior years.
(10)This amount includes $30,000 of forgiven real estate loans, $25,180 paid
for reimbursement of income taxes for 1997 and $24,242 paid for reimbursement
of children's education expenses.
(11)This amount includes $60,000 for a forgiven real estate loan.
(12)This amount includes $69,572 paid for reimbursement of income taxes for
1995 and prior years.
(13)Mr. Cox joined the Company in April 1997.
(14)Other Annual Compensation includes amounts paid for car allowances,
reimbursement of certain medical expenses and income taxes, and other
personal benefits. In these cases, the amounts totaled less than the lesser
of (i) 10% of each officer's salary plus bonus for the year or (ii) $50,000.
(15)This amount includes $90,000 of forgiven real estate loans and $53,098
paid for reimbursement of income taxes for 1997.
(16)This amount includes $60,000 for a forgiven real estate loan.
The following table shows, as to the Chief Executive Officer and each
of the four other executive officers named in the Compensation Table above,
information concerning awards granted under the Company's long-term incentive
plan (the Key Professional Performance Unit Plan) in the fiscal year ended
December 31, 1997.
4
<PAGE>
<TABLE>
<CAPTION>
Performance
Number of or Other Period Estimated Future Payouts
Performance Until Maturation under Non-Stock Based Plans
Name Units or Payout Threshold Target Maximum
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Richard J. Kulle 1,453 1997-1999 $72,625 $145,250 $217,875
King Owyang 640 1997-1999 $32,000 $ 64,000 $ 96,000
Jurgen Biehn 500 1997-1999 $25,000 $ 50,000 $ 75,000
John Cox 0 -- -- -- --
G. Thomas Simmons 540 1997-1999 $27,000 $ 54,000 $ 81,000
</TABLE>
Participation in the Key Professional Performance Unit Plan is
limited to 37 key employees who may be expected to have a substantial
opportunity to influence the performance of the Company. The plan provides
for cash bonuses to be paid to the participants. The amount paid to any
participant in the plan is a measure of the extent to which specified
corporate objectives are achieved over a three-year period, beginning in the
year in which the award of performance units is made. The corporate
objectives consist of the attainment of goals relating to one or more of the
following performance measures: (1) bookings, (2) revenues, (3) earnings
before taxes, (4) return on net assets, (5) return on equity, (6) shareholder
return and (7) net revenue per employee. The Compensation Committee will
determine the target level of performance that must be achieved with respect
to each performance goal in order for that performance goal to be considered
attained.
PENSION CONTRACT
Mr. Biehn has a Pension Contract that was granted by AEG AG, a
former affiliate of the Company. The successor in interest of AEG AG is EHG.
Mr. Biehn's benefits at retirement under this Pension Contract are not
presently determinable; however, as his current employer, the Company
contributed $5,773 to Mr. Biehn's EHG pension account for 1997.
DIRECTORS' COMPENSATION
During 1997, the Chairman of the Board received a $3,500 quarterly
retainer plus $1,500 for each directors' meeting attended, and each other
non-employee director received a $2,250 quarterly retainer plus $1,000 for
each directors' meeting attended. The Company reimburses directors who are
not employees of the Company or any affiliated corporation the expenses
incurred by them in attending Board and committee meetings.
5
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1997, the members of the
Compensation Committee of the Company's Board of Directors were Messrs.
Richard Kulle, Frank Maier and Robert Wehrli. Mr. Kulle is the former
President and Chief Executive Officer of the Company. Mr. Maier is, and Mr.
Wehrli was, a non-employee director.
REPORT OF COMPENSATION COMMITTEE
The Board of Directors has delegated responsibility for determining
executive pay to a Compensation Committee. During 1997, this committee
consisted of three Board members, Messrs. Kulle, Maier and Wehrli. Mr. Kulle
was the only employee director of this Committee, and he was excused from any
discussion involving his own compensation or benefits.
The responsibilities of the Compensation Committee are:
- Establish salary levels for all executives of the Company
- Administer the Company's Key Professional Incentive Bonus Plan
- Administer the Company's Key Professional Performance Unit Plan
- Administer the Company's Qualified Retirement Plan
- Establish general wage increase targets for each fiscal year
- Recommend and/or approve all special bonuses or awards
The Compensation Committee met concurrently with each meeting of the full
Board in 1997.
EXECUTIVE COMPENSATION GENERALLY
Executives of the Company are compensated by base salary and annual
cash incentives (under the Key Professional Incentive Bonus Plan, the Key
Professional Performance Unit Plan and otherwise), as well as other benefits
generally offered to executives by large corporations, such as car allowances
and reimbursement of certain expenses. The amount paid to any participant in
the Key Professional Incentive Bonus Plan is a measure of two performance
components, (i) achievement of corporate objectives, which consist of several
components and will be identical for all participants in the plan, and (ii)
achievement of personal goals, which will be unique for each individual
participant. If a target objective is not met, its influence on the awards
to be made is eliminated and the bonus pool is correspondingly reduced. The
amount paid to any participant in the Key Professional Performance Unit Plan
depends on the achievement of corporate objectives over a three-year period.
These objectives consist of several components. If a target objective is not
met, its influence on the awards to be made is eliminated and the bonus pool
is correspondingly reduced.
6
<PAGE>
The Compensation Committee evaluates both Company and individual
executive performance against the Company's plan for the year and surveys
like industry practices at each facility location. Performance against plan
is the easiest measure to use since the Company prepares a three-year plan
each year. The general Company performance, as well as individual
performance, is used to establish relative contribution for each executive.
The more difficult task in determining executive compensation is
determining levels relative to like industry practices within the community.
The Company contracts with a local compensation consulting firm each year in
order to determine low, average and high compensation levels for each
executive position. These relative numbers include such factors as company
location, company size, individual responsibilities and other executive
benefits. The consulting firm's reports include salaries, bonuses and total
compensation for each measured period. These reports are then used by the
Compensation Committee to determine appropriate salary changes and bonuses
for the current year. The reports are used also to inform the full Board of
Directors of relative compensation levels. Executive salaries are typically
adjusted effective January 1 of each year.
Cash compensation is the primary tool that the Company can use to
attract and hold outstanding executives. Siliconix no longer has stock
option or purchase plans of any kind, and since the Northern California
community, in which most of the Company's senior personnel are located, is
very accustomed to generous stock option plans, the Board of Directors as
well as the Compensation Committee is aware that the Company must maintain
salaries and bonuses at the upper end of community levels if Siliconix is to
maintain its capable staff. It is the Company's policy to pay its personnel
at no less than the 75th percentile of compensation of comparable personnel
in the Silicon Valley. The Company also on occasion provides its executives
with real estate loans that may be forgiven in increments over a specified
number of years, provided that the executive remains employed by the Company
during that period. See Item 13 below.
1997 COMPENSATION OF THE PRESIDENT AND CEO
Mr. Kulle's base salary for 1997 was determined largely in
accordance with the principles described above. In 1996, a very difficult
year for the semiconductor industry generally, the Company achieved a 7%
sales increase, to $268.9 million, and a 7% increase in net income, to $26.0
million. The Compensation Committee considered other factors as well in
determining Mr. Kulle's base salary for 1997; for example, in 1997 Mr. Kulle
had responsibility not only for Siliconix, but was also Chairman of the
Discrete Components Division of the semiconductor division of "TEMIC," the
microelectronics enterprise within the Daimler-Benz Group. Siliconix charges
back to the other members of TEMIC Semiconductors costs and expenses that Mr.
Kulle and other Siliconix employees incur on behalf of such other members.
Based on the foregoing, therefore, the Committee felt it was appropriate to
compensate Mr. Kulle at the upper end of base salary levels for Presidents
and CEOs generally, based upon the report of the Company's compensation
consultants.
7
<PAGE>
Mr. Kulle's bonuses under the Key Professional Incentive Bonus Plan
and the Key Professional Performance Unit Plan reflected 100% achievement of
his personal goals for 1997. In addition, the Company achieved all of its
corporate objectives under the Plans in 1997. The bonuses under the Plans
were determined in accordance with the formulas mandated thereby.
Submitted by the
Compensation Committee:
Frank Maier
STOCK PRICE PERFORMANCE
The following table shows a five-year comparison of cumulative total
stockholder returns, assuming reinvestment of dividends, for the Company, the
S&P 500-Registered Trademark- Index and the S&P-Registered Trademark-
Technology Sector Index. The total shareholder return assumes $100 invested
on December 31, 1992 in Siliconix Common Stock, the S&P 500 Index and the S&P
Technology Sector Index. (The S&P Technology Sector Index was previously
called the S&P High Tech Composite Index.) Historic stock price performance
is not necessarily indicative of future stock price performance, and any
comparison or statement made in this analysis should not be considered a
recommendation or comment relative to the purchase or sale of the Company's
stock.
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Siliconix $100 $ 90 $165 $493 $313 $573
S&P 500-Registered Trademark- $100 $110 $112 $153 $189 $252
S&P-Registered Trademark-
Technology Sector Index $100 $123 $143 $207 $290 $366
</TABLE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table shows the amount of Common Stock of the Company
beneficially owned, as of April 24, 1998, by the only person who to the
knowledge of the Company is the beneficial owner of more than 5% of the
outstanding Common Stock of the Company. Such person has sole investment and
voting power with respect to the shares shown.
8
<PAGE>
<TABLE>
<CAPTION>
Amount
Name and Address Beneficially Percent
of Beneficial Owner Owned of Class
------------------- ------------ --------
<S> <C> <C>
Vishay TEMIC Semiconductor 8,010,000 80.4%
Acquisition Holdings Corp.
63 Lincoln Highway
Malvern, PA 19355
</TABLE>
The following table shows the number and percentage of shares of
Common Stock beneficially owned, as of April 24, 1998, by (i) each current
director and nominee for director, (ii) each executive officer named in the
Summary Compensation Table in Item 11 above and (iii) all directors and
executive officers as a group. Each person has sole investment and voting
power with respect to the shares shown.
<TABLE>
<CAPTION>
Amount
Name of Beneficially Percent
Beneficial Owner Owned of Class
---------------- ------------ --------
<S> <C> <C>
Everett Arndt 0 0
Lori Lipcaman 0 0
Frank Maier 0 0
Glyndwr Smith 1,000 *
Jurgen Biehn 0 0
John Cox 0 0
Richard Kulle 0 0
King Owyang 2,587 *
G. Thomas Simmons 0 0
All directors and executive
officers as a group
(nine persons) 3,587 *
</TABLE>
___________________
*Less than 1%.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In 1991, the Company retired all bank borrowings and certain other
indebtedness and repurchased $6,972,000 in principal amount of its Guaranteed
Floating Rate Subordinated Notes.
9
<PAGE>
The funds used for these purposes were obtained from AEG Aktiengesellschaft,
then an affiliated corporation, through loans of $15,000,000 at 7.875% and
$18,500,000 at LIBOR plus 0.25%. In 1992, $1.07 million of interest was
added to the outstanding principal amount. At December 31, 1997, the current
principal amount of $34.57 million was owed to Daimler-Benz Capital, Inc.,
then an affiliated corporation. Subsequent to the acquisition of 80.4% of
the Company's outstanding Common Stock by Vishay Intertechnology, Inc.
("Vishay") in March 1998, this indebtedness was assigned to Vishay. It bears
interest at a floating rate based on Vishay's cost of funds, currently
6.2625% per annum, and is due in 2001.
In April 1998, the Company borrowed $5,000,000 from VSH Holdings,
Inc., a wholly-owned subsidiary of Vishay. The indebtedness bears interest
at a floating rate based on Vishay's cost of funds, currently 6.265% per
annum, and is due in April 1999.
In 1994, the Company loaned Richard Kulle, President and Chief
Executive Officer, $400,000 to assist Mr. Kulle in the purchase of a new
home. Of the principal amount, $40,000 was forgiven in each of 1995-1996,
$60,000 was forgiven in 1997, and $260,000 was forgiven in 1998. Later in
1994, the Company loaned Mr. Kulle an additional $250,000. Of this amount,
$50,000 was forgiven in 1995, $100,000 was forgiven in 1997 and the remaining
$100,000 is payable in 1999. In 1995, the Company loaned Mr. Kulle $400,000
for personal expenses. Of this amount, $300,000 remains outstanding and is
payable in 2000. The principal amount outstanding from time to time on these
loans bears interest at a floating rate that approximates the Company's cost
of money, currently between 5% and 6% per annum. Interest on these loans was
forgiven in 1997.
In March 1998, Mr. Kulle resigned as President, Chief Executive
Officer and a director of the Company. Pursuant to an agreement among him,
the Company and Vishay, Mr. Kulle received payments aggregating $1,647,173 in
March and April 1998. In March 1999 and March 2000, he will receive payments
of $500,000 and $779,603, respectively, plus interest at 6% per annum on such
amounts from March 1998 to the payment date. Of the foregoing payments, the
amount of $1,279,603 was paid to Mr. Kulle in consideration of a
non-competition and non-solicitation agreement, pursuant to which Mr. Kulle
agreed that for a period expiring in March 2000, he will not provide services
in any capacity to any person or entity that competes, directly or
indirectly, with the Company's March 1998 product line.
In 1988, the Company loaned $150,000 to King Owyang, now President
and Chief Executive Officer, without interest, in connection with Dr.
Owyang's relocation and employment by the Company. Of this amount, $100,000
was repaid, $28,000 was forgiven in 1994 and $22,000 was forgiven in 1995.
In 1993 and 1994, the Company loaned an additional $250,000 to Dr. Owyang,
and in 1996, the Company loaned an additional $200,000 to Dr. Owyang. Of
this amount, $40,000 was forgiven in 1995, $80,000 was forgiven in 1996,
$180,000 was forgiven in 1997, and $150,000 will be forgiven in 1998,
provided Dr. Owyang remains employed by Siliconix during that period. The
principal amount outstanding from time to time on these loans bears interest
at a floating rate that approximates the Company's cost of money, currently
between 5% and 6% per annum. Interest on these loans was forgiven in 1997.
10
<PAGE>
In 1993, the Company loaned Jurgen Biehn, the former Senior Vice
President and Chief Financial Officer, $300,000 to assist Mr. Biehn in the
purchase of a new home. Of this amount, $30,000 was forgiven in 1994-1995,
$60,000 was forgiven in 1996, $30,000 was forgiven in 1997, and $30,000 will
be forgiven in each of 1998-2002. The principal amount outstanding from time
to time bears interest at a floating rate that approximates the Company's
cost of money, currently between 5% and 6% per annum. Interest on this loan
was forgiven in 1997.
In April 1998, Mr. Biehn resigned as Senior Vice President and
Chief Financial Officer of the Company. Mr. Biehn received a severance
payment of $669,195 in April 1998.
In 1994, the Company loaned $50,000 to G. Thomas Simmons, the
former Vice President, Marketing, in connection with Mr. Simmons's relocation
and employment by the Company. Of this amount, $16,667 was forgiven in 1995
and $16,666 was forgiven in 1996-1997. In 1995, the Company loaned an
additional $150,000 Mr. Simmons, to assist Mr. Simmons in the purchase of a
new home. Of this amount, $60,000 was forgiven in 1996 and $90,000 was
forgiven in 1997. The principal amount outstanding on these loans from time
to time bore interest at a floating rate that approximated the Company's cost
of money, currently between 5% and 6% per annum. Interest on these loans was
forgiven in 1997.
In March 1998, Mr. Simmons resigned as Vice President, Marketing of
the Company. Mr. Simmons received a severance payment of $751,869 in April
1998.
11
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
3. EXHIBITS
3.1 Restated Certificate of Incorporation(1)
3.2 Bylaws(2)
10.2 One-Year Key Professional Incentive Bonus Plan(1)
10.3 Key Professional Performance Unit Plan(2)
10.5 Amended and Restated License Agreement dated April 10, 1990
between the Company and International Rectifier Corporation(1)
10.6 Amendment to Amended and Restated License Agreement dated
December 21, 1990 between the Company and International
Rectifier Corporation(1)
10.10 Pension Contract dated January 26, 1995 between Richard J.
Kulle and TEMIC TELEFUNKEN microelectronic GmbH(3)
10.11 Special Retention Bonus Plan of Siliconix incorporated(4)
10.12 Change-in-Control Severance Plan of Siliconix incorporated(4)
10.13 Special Retention Bonus Plan (1998) of Siliconix
incorporated(5)
10.14 Amendment No. 1 to Change-in-Control Severance Plan of
Siliconix incorporated(5)
10.15 Amendment No. 1 to Siliconix One-Year Key Professional
Incentive Bonus Plan(5)
10.16 Amendment No. 2 to Siliconix One-Year Key Professional
Incentive Bonus Plan(5)
10.17 Amendment No. 1 to Siliconix Key Professional Performance
Unit Plan(5)
10.18 Amendment No. 2 to Siliconix Key Professional Performance
Unit Plan(5)
10.19 Employment agreement dated April 1, 1997 between the Company
and John Cox(6)
10.20 Separation Agreement and Mutual Release dated March 11, 1998
among the Company, Vishay Intertechnology, Inc. and Richard
Kulle
10.21 Amendment No. 1 to Separation Agreement and Mutual Release
dated March 19, 1998 among the Company, Vishay
Intertechnology, Inc. and Richard Kulle
10.22 Promissory Note dated April 13, 1998 in the principal amount
of $5,000,000 by the Company to VSH Holdings, Inc.
13 Portions of Siliconix incorporated 1997 Annual Report to
Shareholders(6)
21 Subsidiaries of the Company(6)
12
<PAGE>
27 Financial Data Schedule(6)
_____________________
(1)Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990, filed with the SEC on
April 15, 1991.
(2)Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, filed with the SEC on
April 1, 1996.
(3)Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994, filed with the SEC on
April 10, 1995.
(4)Incorporated by reference to Exhibits to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 30, 1997, filed with the SEC on May 14,
1997.
(5)Incorporated by reference to Exhibits to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 28, 1997, filed with the SEC on
November 12, 1997.
(6)Incorporated by reference to Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, filed with the SEC on
March 31, 1998.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: April 30, 1998
SILICONIX INCORPORATED
By: /s/King Owyang
------------------------------
King Owyang
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Principal Executive Officer
/s/King Owyang President and Chief Executive
- ------------------------ Officer April 30, 1998
King Owyang
Principal Financial and Accounting Officer
/s/Jens Meyerhoff Senior Director and
- ------------------------ Corporate Controller April 30, 1998
Jens Meyerhoff
/s/Everett Arndt Director April 30, 1998
- ------------------------
Everett Arndt
/s/Lori Lipcaman Director April 30, 1998
- ------------------------
Lori Lipcaman
/s/Frank Maier Director April 30, 1998
- ------------------------
Frank Maier
/s/Glyndwr Smith Director April 30, 1998
- ------------------------
Glyndwr Smith
</TABLE>
14
<PAGE>
INDEX TO EXHIBITS
Exhibit
-------
3.1 Restated Certificate of Incorporation(1)
3.2 Bylaws(2)
10.2 One-Year Key Professional Incentive Bonus Plan(1)
10.3 Key Professional Performance Unit Plan(2)
10.5 Amended and Restated License Agreement dated April 10, 1990
between the Company and International Rectifier Corporation(1)
10.6 Amendment to Amended and Restated License Agreement dated
December 21, 1990 between the Company and International
Rectifier Corporation(1)
10.10 Pension Contract dated January 26, 1995 between Richard J.
Kulle and TEMIC TELEFUNKEN microelectronic GmbH(3)
10.11 Special Retention Bonus Plan of Siliconix incorporated(4)
10.12 Change-in-Control Severance Plan of Siliconix incorporated(4)
10.13 Special Retention Bonus Plan (1998) of Siliconix
incorporated(5)
10.14 Amendment No. 1 to Change-in-Control Severance Plan of
Siliconix incorporated(5)
10.15 Amendment No. 1 to Siliconix One-Year Key Professional
Incentive Bonus Plan(5)
10.16 Amendment No. 2 to Siliconix One-Year Key Professional
Incentive Bonus Plan(5)
10.17 Amendment No. 1 to Siliconix Key Professional Performance
Unit Plan(5)
10.18 Amendment No. 2 to Siliconix Key Professional Performance
Unit Plan(5)
10.19 Employment agreement dated April 1, 1997 between the Company
and John Cox(6)
10.20 Separation Agreement and Mutual Release dated March 11, 1998
among the Company, Vishay Intertechnology, Inc. and Richard
Kulle
10.21 Amendment No. 1 to Separation Agreement and Mutual Release
dated March 19, 1998 among the Company, Vishay
Intertechnology, Inc. and Richard Kulle
10.22 Promissory Note dated April 13, 1998 in the principal amount
of $5,000,000 by the Company to VSH Holdings, Inc.
13 Portions of Siliconix incorporated 1997 Annual Report to
Shareholders(6)
21 Subsidiaries of the Company(6)
15
<PAGE>
27 Financial Data Schedule(6)
_____________________
(1)Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990, filed with the SEC on
April 15, 1991.
(2)Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, filed with the SEC on
April 1, 1996.
(3)Incorporated by reference from Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994, filed with the SEC on
April 10, 1995.
(4)Incorporated by reference to Exhibits to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 30, 1997, filed with the SEC on May 14,
1997.
(5)Incorporated by reference to Exhibits to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 28, 1997, filed with the SEC on
November 12, 1997.
(6)Incorporated by reference to Exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997, filed with the SEC on
March 31, 1998.
16
<PAGE>
SEPARATION AGREEMENT AND MUTUAL RELEASE EXHIBIT 10.20
This Separation Agreement and Mutual Release ("Agreement") is entered
into as of March 11, 1998 by and among Siliconix Incorporated, a Delaware
corporation (the "Company"), Vishay Intertechnology, Inc., a Delaware
corporation ("Vishay") and Richard J. Kulle ("Executive").
RECITALS
1. Executive is currently employed by the Company as its President
and Chief Executive Officer and also serves as a member of the Board of
Directors.
2. Vishay has acquired a majority of the outstanding Common Stock of
the Company.
3. Executive, the Company and Vishay wish to set forth their
agreement whereby Executive will resign from all executive positions and as an
employee and a director of the Company and any subsidiaries and the Company
agrees to accept such resignation. The Company, Vishay and Executive have
further mutually agreed to terminate their employment relationship and to
release each other from any claims arising from or related to the employment
relationship.
4. The Company has provided Executive with various severance
agreements (the "Severance Agreement") and certain loans (the "Loan
Agreements"). This Agreement will terminate and supersede the Severance
Agreements in all respects except as otherwise specifically provided herein.
NOW THEREFORE, in consideration of the mutual promises made herein, the
Company, Vishay and Executive (collectively referred to as the "Parties") hereby
agree as follows:
1. RESIGNATION. Executive hereby resigns from all executive
positions with the Company and any subsidiaries of the Company, including as
President and Chief Executive Officer of the Company, and also as an employee
and a director of the Company on the Effective Date. For purposes of this
Agreement, references to the Company shall include the Company and any wholly-
owned or partially-owned subsidiary of the Company.
2. CONSIDERATION. In consideration of Executive's past services to
the Company, and in consideration for Executive's promises and covenants herein,
the Company shall pay Executive, subject to Section 3 herein, as follows.
Vishay hereby agrees to take such action as is necessary to cause the Company to
make such payments to Executive or, to make such payments itself to Executive
if the Company fails to make such payments.
(a) SALARY. The Company will pay Executive within seventy-two
(72) hours of the Effective Date all salary earned through the Effective Date,
less applicable withholding.
(b) SEPARATION PAYMENTS. Executive shall receive the following
payments: (i) on the Effective Date a payment of $1,500,000; (ii) on the one
year anniversary of the Effective Date a payment of $500,000 (plus interest at
6% on such amount from the Effective Date to the payment date) and (iii) on the
two year anniversary of the Effective Date a payment of $ 779,603 (plus interest
at 6% on such amount from the Effective Date to the payment date). The Parties
hereby agree that of the foregoing payments, the amount of $1,279,603 is being
paid to Executive in consideration of his non-competition and non-solicitation
agreement and is subject to Section 3 of this Agreement.
<PAGE>
(c) BUSINESS EXPENSES. The Company shall reimburse Executive
for all business expenses incurred in connection with carrying out the business
of the Company through the Effective Date promptly upon receiving backup
documentation in reasonable detail documenting such expenses.
(d) BENEFITS. Executive shall receive continued coverage,
through March 11, 2001 (the "Continued Coverage Period"), under each Employee
Welfare Benefit Plan (as defined) of the Company in which he was participating
as of March 1, 1998, at no increased cost to Executive, provided that the
Company's obligations under this Section 2(d) shall be reduced to the extent
Executive receives similar coverage and benefits under the plans of a subsequent
employer. Executive shall promptly provide the Company with notice and
information reasonably requested by the Company concerning such plans. If
Executive or any member of his family is precluded from continuing full
participation in any benefit under any Employee Welfare Benefit Plan as provided
in this Section 2(d), then the Company shall provide Employee with at least
sixty (60) days advance written notice and shall make a payment to Executive
equal to 2 times the cost of "COBRA" coverage, for the number of months obtained
by subtracting from (i) 36 months (ii) the number of months from the
Effective Date to the date coverage under the plan became unavailable. Such
amount shall be paid in a lump sum on the date Executive or any member of his
family is no longer covered under such plan. Executive acknowledges and agrees
that Executive can elect continuation coverage under the Company's life,
disability, accidental death, dismemberment, travel and accident plans and that
the payment in Section 2(b)(i) includes all payments owed by the Company for
such coverage. For purposes of this Agreement "Employee Welfare Benefit Plan"
shall mean "any medical, dental, hospitalization, vision, plan or program made
available to the Executive."
The Company shall continue to pay for six (6) months after
the Effective Date the following car payments for Executive's company provided
automobile; (i) monthly car payment, (ii) maintenance, (iii) insurance under the
Company's fleet plan, and (iv) gas and cleaning (or, at the Company's option, a
one-time payment of $1,200 in lieu of actual gas and cleaning).
(e) LOAN AGREEMENTS. The Company and the Executive are parties
to three loan agreements attached hereto as Exhibits A-1, A-2 and A-3
(collectively the "Loan Agreements").
(i) The Company and Executive agree that the loan dated
December 31, 1997 (Exhibit A-1) has an amended loan balance of $180,000 and
accrued interest of $15,272 as of March 2, 1998 and hereby confirm such loan and
accrued interest is canceled and forgiven in its entirety as of March 2, 1998.
(ii) The Company and Executive agree that the loan dated
July 3, 1997 (Exhibit A-2) has an amended loan balance of $100,000 as of the
Effective Date and accrued interest as of such date of $3,908. Such loan is due
and payable on September 28, 1999. The Company and Executive hereby agree that
such loan shall be repaid in its entirety on the one year anniversary of the
Effective Date and that the Company shall reduce the payment in Section 2(b)(ii)
by the amount of $109,408 in full satisfaction of principal and interest on such
loan.
(iii) The Company and Executive agree that the loan
dated December 23, 1997 (Exhibit A-3) has an amended loan balance of $300,000 as
of the Effective Date and accrued interest as of such date of $10,013. Such
loan is due and payable on January 25, 2004. The Company and Executive hereby
agree that such loan shall be repaid in its entirety on the two year anniversary
of the Effective Date and that the Company shall reduce the payment in
Section 2(b)(ii) by the amount of $343,019 in full satisfaction of principal and
interest on such loan.
18
<PAGE>
(f) NO MITIGATION; LIMITED OFFSET. Executive shall be under no
obligation to seek other employment and there shall be no offset against amounts
due Executive under this Agreement on account of any remuneration or other
benefit attributable to any subsequent employment that he may obtain except as
specifically provided in Section 2(d).
(g) NATURE OF PAYMENTS. Any amounts due under this Section 2
are in the nature of severance and non-competition payments considered to be
reasonable by the Company and are not in the nature of a penalty.
(h) INDEMNIFICATION. The Company shall continue to provide
Executive with full indemnification under the Company's certificate of
incorporation and by-laws as in effect on March 1, 1998 and the Indemnification
Agreement between the Company and Executive dated May 29, 1991 (copies of which
are attached as Exhibits B-1, B-2 and B-3). For six years the Company shall
use commercially reasonable efforts to continue to include Executive as a named
insured under the Company's director and officer insurance policy with coverage
amounts at least equal to those in effect as of March 1, 1998. Vishay agrees to
take all action necessary to assure that the Company provides the foregoing
indemnification and all action commercially reasonable to provide the foregoing
insurance coverage to Executive.
3. FORFEITURE OF BENEFITS UPON BREACH. In the event that Executive
breaches Section 4 or 5 of this Agreement as the sole and exclusive remedy
(i) all obligations of the Company to make any payments or provide any benefits
under Sections 2(b)(ii) and 2(b)(iii) shall immediately terminate and Executive
shall promptly repay, net of all taxes paid or payable, any amounts he may have
received under these Sections 2(b)(ii) and 2(b)(iii).
4. NON-COMPETITION. For a period of twenty-four (24) months
following the Effective Date, Executive agrees as follows. Executive shall not
provide services, whether for compensation or otherwise, as an officer,
director, employee, consultant or in any other capacity to any person or entity
that competes, directly or indirectly, with the Company's current product line
offered commercially on the Effective Date (the "Company Products"). In this
regard, Executive acknowledges that the business of the Company is national and
international in nature. Executive also acknowledges that this period of time,
scope of business and geographic extent are reasonably necessary to protect the
legitimate business interests of the Company. The foregoing restrictions shall
not apply to and Executive shall have the right to, directly or as an officer,
director, employee, consultant or in any other capacity with any person or
entity, assemble, test, develop and manufacture any products, and to assemble,
test and manufacture for other persons or entities products that compete with
the Company Products, provided Executive or such person or entity does not
market and sell any product which competes with the Company Products directly to
the market (OEM customers) or to distributors and Executive or such person or
entity is not involved in research and development, wafer fabrication, software
design or "fabless" activity (using foundry production) of any product which
competes with the Company Products.
The Company and Vishay agree that the foregoing non-competition
provision does not apply to IRDC products or products of any companies or
entities not including the Company that Vishay acquired at the time of its
acquisition of the majority ownership of the Company.
5. NON-SOLICITATION. For a period of twelve (12) months following
the Effective Date, Executive shall not, and shall not intentionally or
knowingly allow others under his direction to, solicit, directly or indirectly,
any then current Company employee to terminate his or her employment with the
Company for the purpose of working as an officer, director, employee, consultant
or in any other capacity for either Executive or any of his employers. For
purposes of the above, an employer of Executive's will be deemed to include
(i) any parent or subsidiary of such an employer or (ii) any person or company
for which Executive provides consulting
19
<PAGE>
services or for which he acts in the capacity of director. The foregoing
shall not prohibit Executive or any employee with which Executive may be
affiliated from hiring an employee or former employee of the Company;
provided that such hiring results from such employee's initiative in
contacting Executive or any employer Executive is affiliated with. In
addition, if Executive or such employer desires to hire such employee after
such contact, Executive agrees to contact the Company and to work with the
Company to find a reasonable transition to enable the Company to replace such
employee or modify the organization, provided such transition shall not
exceed three (3) months.
6. CONFIDENTIALITY. Executive acknowledges that the Employment,
Invention, Authorship, Proprietary and Confidential Information Agreement dated
June 1, 1987 (the "Confidentiality Agreement") that he signed in connection with
his employment and that is appended to this Agreement as Exhibit C, shall
remain in full force and effect.
7. PAYMENT OF SALARY. Executive acknowledges and represents that,
upon full performance of its obligations under this Agreement, the Company will
have paid or made all salary, bonuses, severance amounts and any and all other
compensation or benefits due to Executive as of the Effective Date as in
connection with the termination of his employment with the Company.
8. RELEASE OF CLAIMS. The Parties acknowledge and agree that this
Agreement represents settlement in full of all obligations and claims arising
out of or relating to Executive's employment by the Company and the termination
of such employment as provided in this Agreement. Executive, the Company and
Vishay, on behalf of themselves, and their respective heirs, executors,
officers, directors, employees, investors, shareholders, administrators,
predecessor and successor corporations, and assigns, hereby fully and forever
release each other and their respective heirs, executors, officers, directors,
employees, investors, shareholders, administrators, predecessor and successor
corporations, and assigns, of and from any claim, duty, obligation or cause of
action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that any of them may possess arising from any
omissions, acts or facts that have occurred up until and including the Effective
Date including, without limitation,
(a) any and all claims relating to or arising from Executive's
employment by (or services for) the Company, his employment relationship with
the Company and the termination of that relationship;
(b) any and all claims for wrongful discharge of employment;
breach of contract, both express and implied; breach of a covenant of good faith
and fair dealing, both express and implied; negligent or intentional infliction
of emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage; and
defamation;
(c) any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, the Employment Retirement
Income Security Act of 1974, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the
Americans with Disabilities Act of 1990, and the California Fair Employment and
Housing Act;
(d) any and all claims arising out of any other laws and
regulations relating to employment or employment discrimination;
(e) any claims arising out of or related to the Severance
Agreements;
(f) any and all claims for attorneys' fees and costs;
20
<PAGE>
(g) all claims arising out of or relating to Executive's
conduct as an employee, officer, director, agent or representative of the
Company;
(h) all claims arising out of or relating to duties owed by
Executive to the Company or to any of its directors, officers, employees,
agents, affiliates, stockholders, lenders, investors, predecessor or successor
corporations, assigns, attorneys, accountants or other representatives; and
(i) any claims Executive may have against Temic Telefunken
microelectronic Gmbh ("Temic") for payments under any severance or other
agreement or plan that Executive participates in arising from a termination of
Executive by Temic after the acquisition of Temic by Vishay, provided that this
release shall not apply to amounts owed by Temic to Executive under such plans
prior to or in connection with successful completion of such acquisition.
The Company, Vishay and Executive agree that the release set forth in this
Section shall be and remain in effect in all respects as a complete general
release as to the matters released. This release does not extend to any
obligations arising under, incurred under, or preserved by this Agreement.
9. ACKNOWLEDGMENT OF WAIVER OF CLAIMS UNDER ADEA. Executive
acknowledges that he is waiving and releasing any rights he may have under the
Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Executive and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
ADEA after the Effective Date. Executive acknowledges that the consideration
given for this waiver and release is in addition to anything of value to which
Executive was already entitled. Executive further acknowledges that he has been
advised by this writing that (a) he should consult with an attorney PRIOR to
executing this Agreement; (b) he has at least twenty-one (21) days within which
to consider this Agreement; (c) he has at least seven (7) days following the
execution of this Agreement by the Parties to revoke the Agreement; and (d) this
Agreement shall not be effective until the revocation period has expired.
10. CIVIL CODE SECTION 1542. The Parties represent that they are not
aware of any claim by any of them other than the claims that are released by
this Agreement. Executive, the Company and Vishay acknowledge that they have
been advised by legal counsel and are familiar with the provisions of California
Civil Code Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR.
Executive, the Company and Vishay, being aware of said Code section,
agree to expressly waive any rights they may have thereunder, as well as under
any other statute or common law principles of similar effect.
11. PAYMENT ON DEATH. In the event of death of Executive, all unpaid
amounts shall be accelerated and paid to Executive's surviving spouse or to
Executive's estate if Executive has no surviving spouse.
12. FEES AND EXPENSES. Each of the Parties hereto shall bear their
own fees and expenses, including attorneys fees, incurred in connection with the
negotiation of this Agreement or otherwise arising out of, or by
21
<PAGE>
reason of, this Agreement.
13. TAXES. All payments to be made by the Company to Executive under
this Agreement will be subject to reduction to the extent necessary in order to
comply with applicable Federal, state and local tax withholding requirements.
The Company hereby warrants to Executive that no payments under this Agreement
will be deemed an "excess parachute payment" under Internal Revenue Code
Section 280G.
14. CONFIDENTIALITY. The Parties hereto each agree to use their best
efforts to maintain in confidence the existence of this Agreement, the contents
and terms of this Agreement, and the consideration for this Agreement, except
where disclosure of the terms of this Agreement is otherwise required by law and
except for disclosure in confidence to financial, tax, and legal advisors and
disclosure by Executive in confidence to prospective employers.
15. DISPARAGEMENT. Each Party agrees to refrain from any
disparagement, criticism, defamation, and slander of the other Party.
16. NO REPRESENTATIONS. Each Party represents that it or he has had
the opportunity to consult with an attorney, and has carefully read and
understands the scope and effect of the provisions of this Agreement. No Party
has relied upon any representations or statements made by any other Party hereto
which are not specifically set forth in this Agreement.
17. ENTIRE AGREEMENT. This Agreement, the Confidentiality Agreement
and those portions of the Loan Agreements preserved by this Agreement represent
the entire agreement and understanding between the Company, Vishay and Executive
concerning Executive's separation from the Company, and supersede and replace
any and all prior agreements and understandings concerning Executive's
relationship with the Company and his compensation by the Company, including
without limitation, the Severance Agreements, except as otherwise provided in
this Agreement.
18. ASSIGNABILITY; BINDING NATURE. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns. No rights or obligations of the Company or Vishay under this Agreement
may be assigned or transferred by the Company or Vishay except that such rights
or obligations shall be assigned or transferred pursuant to a merger or
consolidation in which the Company or Vishay is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the Company
or Vishay, and the Company or Vishay shall provide that such assignee or
transferee expressly assumes all the liabilities, obligations and duties of the
Company or Vishay, as contained in this Agreement. In connection with any
transfer or assignment of its rights, duties, or obligations under this
Agreement, the Company or Vishay shall take whatever action it legally can to
cause such assignee or transferee to expressly assume the labilities,
obligations and duties of the Company or Vishay hereunder. The Company and
Vishay shall, in any event, remain as unconditional guarantor of prompt payment
and prompt satisfaction of all such liabilities, obligations and duties. No
rights, obligations or duties of the Executive under this Agreement may be
assigned or transferred, other than his rights to compensation and benefits,
which may be transferred only by will or operation of law, except as provided in
Section 23 below.
19. REPRESENTATIONS. The Company and Vishay represent and warrant
that each is fully authorized and empowered by any required corporate action to
enter into this Agreement and that the performance of its obligations under this
Agreement will not violate any law, regulation or order of any agreement between
it and any other person. The Executive represents and warrants that he is not
subject to any agreement or obligation that conflicts with or would be breached
by the provisions of this Agreement.
22
<PAGE>
20. AMENDMENT OR WAIVER. No provision in this Agreement may be
amended unless such amendment is set forth in a writing signed by the Parties.
No waiver by either Party of any breach of any condition or provision contained
in this Agreement shall be deemed a waiver of a similar or dissimilar condition
or provision at the same or any prior or subsequent time. To be effective, any
waiver must be set forth in writing and signed by the waiving Party.
21. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remainder of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by law
so as to achieve the purposes of this Agreement.
22. SURVIVORSHIP. Except as otherwise expressly set forth in this
Agreement, the respective rights and obligations of the Parties hereunder shall
survive the termination of Executive's employment. This Agreement itself (as
distinguished from the Executive's employment) may not be terminated by any
Party.
23. BENEFICIARIES/REFERENCES. The Executive shall be entitled, to the
extent permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit hereunder following the
Executives's death, by giving written notice to the Company. In the event of
the Executive's death or a judicial determination of his incompetence,
references in this Agreement to the Executive shall be deemed, where
appropriate, to refer to his beneficiary, estate or other legal representative.
24. RESOLUTION OF DISPUTES. Any claim arising out of or relating
to this Agreement or out of Executive's employment by, or services for the
Company, shall be resolved by confidential arbitration, to be held in Santa
Clara County, California, in accordance with the Commercial Arbitration Rules
of the American Arbitration Association. The arbitrator(s) shall explain the
reasons and basis of his (their) award in detail and in writing, and judgment
upon the award may be entered in any court having jurisdiction thereof. Each
Party shall bear their own respective costs and expenses relating to
resolving any such claim. Pending the final and conclusive resolution of any
such claim, the Company and Vishay shall continue prompt payment of all
amounts due the Executive under this Agreement and prompt provision of all
benefits to which the Executive or his successors and assigns are entitled.
25. NOTICES. Any notice, consent, demand, request, or other
communication given to a Party in connection with this Agreement shall be in
writing and shall be deemed to have been given (a) when delivered personally to
the Party specified or (b), provided that reasonable steps are taken to assure
that the communication is actually received by the Party specified, five
business days after being sent by certified or registered mail, postage prepaid,
return receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently give
notice of:
If to the Company and/or Vishay:
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355-2120
Attention: Avi Eden
With a copy sent by the same means to:
23
<PAGE>
Siliconix, Inc.
2201 Laurelwood Road
Santa Clara, CA 95054
Attn: General Counsel
If to the Executive:
Richard J. Kulle
12341 Stonebrook Court
Los Altos Hills, CA 94022-5133
With a copy sent by the same means to:
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Barry E. Taylor, Esq.
26. HEADINGS. The headings of the Sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
27. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of California, without reference to its choice of law principles.
28. COUNTERPARTS. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
29. VOLUNTARY EXECUTION OF AGREEMENT. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
(a) They have read this Agreement;
(b) They have been represented in the preparation, negotiation,
and execution of this Agreement by legal counsel of their own choice or that
they have voluntarily declined to seek such counsel;
(c) They understand the terms and consequences of this
Agreement and of the releases it contains;
(d) They are fully aware of the legal and binding effect of
this Agreement.
30. EFFECTIVE DATE. The Effective Date of this Agreement shall be
seven (7) days after execution by all parties as required under ADEA.
IN WITNESS WHEREOF, the Parties have executed this Agreement on
the respective dates set forth below.
24
<PAGE>
SILICONIX INCORPORATED
Dated: March 11, 1998 By: /s/David Achterkirchen
------------------------
Dated: March 11, 1998 VISHAY INTERTECHNOLOGY, INC.
By: /s/Avi Eden
------------------------
Dated: March 11, 1998 /s/Richard J. Kulle
----------------------------
Richard J. Kulle
25
<PAGE>
EXHIBIT 10.21
AMENDMENT NO. 1 TO
SEPARATION AGREEMENT AND MUTUAL RELEASE
This Amendment No. 1 to Separation Agreement and Mutual Release is
entered into as of March 19, 1998 by and among Siliconix incorporated, a
Delaware corporation (the "Company"), Vishay Intertechnology, Inc., a
Delaware corporation ("Vishay"), and Richard J. Kulle ("Executive").
RECITALS
A. The Company, Vishay and Executive are parties to a Separation
Agreement and Mutual Release dated March 11, 1998 (the "Agreement").
B. The parties to the Agreement desire to amend the same, as
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises made herein, the
parties hereto hereby agree as follows:
1. WAIVER OF BENEFITS. Executive hereby agrees to waive all of his
rights under Section 2(d) of the Agreement; provided, however, that the
Company shall continue to make the lease and automobile insurance payments
covering Executive's company-provided automobile for as long as Executive
maintains possession of said automobile. Executive understands that by
executing this Amendment No. 1, he is waiving all of his rights to receive
benefits under any Employee Welfare Benefit Plan, as that term is defined in
the Agreement, except as specifically provided in this Section 1. The
parties acknowledge and agree, however, that Executive's rights (i) under the
Siliconix Retirement Plan and (ii) to continue medical insurance under COBRA
at his expense subsequent to March 11, 1998 shall not be affected by this
Amendment No. 1.
2. LUMP SUM PAYMENT. In consideration of the waiver given by
Executive in Section 1 hereof, the Company hereby agrees to pay, within seven
days after this Amendment shall have been fully executed by the parties
hereto, a net, I.E., grossed up, lump sum payment of $95,000. This is
comprised of the following:
<TABLE>
<CAPTION>
<S> <C>
Medical and life insurance $93,151.28
Automobile gas and cleaning 1,200.00
Automobile maintenance 648.72
----------
Total: $95,000.00
----------
----------
</TABLE>
For the derivation of the amount allocated to medical and life insurance, see
Exhibit A attached hereto and made a part hereof.
3. EFFECT OF AMENDMENT ON AGREEMENT. Except as amended hereby, the
Agreement shall remain in full force and effect, in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
1 on the respective dates set forth below.
SILICONIX INCORPORATED
26
<PAGE>
Dated: March 19, 1998 By: /s/David Achterkirchen
------------------------------
David Achterkirchen, Secretary
VISHAY INTERTECHNOLOGY, INC.
Dated: March 20, 1998 By: /s/William Spires
------------------------------
William Spires, Vice President
Dated: March 19, 1998 /s/ Richard J. Kulle
-----------------------------------
Richard J. Kulle
27
<PAGE>
Exhibit 10.22
SILICONIX INCORPORATED
PROMISSORY NOTE
$5,000,000 Date 4/13/98
-----------------
SILICONIX INCORPORATED, a Delaware corporation (hereinafter referred to
as the "Borrower"), for value received hereby promises to pay to the order of
VSH HOLDINGS, INC., a Delaware corporation (such company, its assigns and all
subsequent holders hereinafter referred to as "Lender"), at its office in
Dover, Delaware, on the three hundredth sixty-sixth (366) day from the date
first above written, the sum of Five Million Dollars ($5,000,000) with
interest at the rate of 6.265% or at such rate as Lender may specify from
time to time. Interest is to be paid quarterly in arrears on March 31, June
30, September 30 and December 31, beginning June 30, 1998, along with any
interest that may be due upon payment in full. If these dates are not
business days, then interest is to be paid on the next business day.
Payment on this Note will be made without any defense, set-off or
counterclaim which Borrower may have against Lender.
SILICONIX INCORPORATED
By /s/ King Owyang
--------------------------
Its
--------------------------
