kl05015.htm
SCHEDULE
14A
(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 o
Check
the appropriate box:
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o
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Preliminary
proxy statement
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o
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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o
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Definitive
proxy statement
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x
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Definitive
additional materials
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Soliciting
material pursuant to Rule 14a-11(c) or Rule
14a-12
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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):
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x
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(c)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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o
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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o
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Fee
paid previously with preliminary materials.
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o
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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.
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(1)
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Amount
Previously Paid:
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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VISHAY
INTERTECHNOLOGY, INC.
63
LANCASTER AVENUE
MALVERN,
PENNSYLVANIA 19355
----------------------------------------
SUPPLEMENT
TO PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON MAY 26, 2009
-------------------------------------------------
Dear
Stockholder:
On or
about April 9, 2009, you were mailed proxy materials for the Annual Meeting of
Stockholders of Vishay Intertechnology, Inc. (the “Company”) to be held at 11:30
a.m. on May 26, 2009 at the Vishay Intertechnology, Inc. World Headquarters, 63
Lancaster Ave., Malvern, PA 19355, for the purposes set forth in the Notice of
2009 Annual Meeting of Stockholders, including a proxy statement dated April 9,
2009.
This
supplement to proxy statement supplements and amends information contained in
the proxy statement to provide updated and amended information with respect to
the employment agreement of Dr. Felix Zandman, the Chief Technical and Business
Development Officer of the Company and the Executive Chairman of the Company’s
Board of Directors. Except as amended or supplemented by the
information contained in this supplement, all information set forth in the proxy
statement remains accurate in all material respects and should be considered in
casting your vote by proxy or at the Annual Meeting. You should read
this supplement in conjunction with the proxy statement.
This
supplement does not change the proposals to be acted upon at the Annual Meeting,
which are described in the proxy statement.
The
Company has entered into an amended and restated the employment agreement with
Dr. Zandman, effective as of May 13, 2009. This agreement amends and
restates the employment agreement between the Company and Dr. Zandman that is
described in the proxy statement and that was previously amended and restated as
of January 1, 2004. The amended employment agreement eliminates Dr.
Zandman’s right to receive substantial royalty payments upon the termination of
his employment in certain circumstances, as described below, and replaces it
with a series of significantly reduced payments payable to him in six annual
installments.
The 2004
employment agreement included a provision entitling him to a royalty during the
ten years following his termination of employment equal to 5% of gross sales,
less returns and allowances, of Vishay products incorporating patents,
inventions and any other form of technology created, discovered or developed by
him or under his direction. The royalty was payable in the event Dr.
Zandman was terminated without “cause” or resigned for “good reason,” as defined
in the 2004 employment agreement. This provision was carried over
from Dr. Zandman’s original employment agreement of March 1985, and could not be
modified or eliminated without Dr. Zandman’s consent. It was a
reflection, among other things, of Dr. Zandman’s key role in the founding of the
Company and creating, developing and commercializing the Company’s technologies
and the absence of any compensation to Dr. Zandman for the core intellectual
property that he has contributed to the Company over the years from its
inception.
As noted
in the proxy statement, the Company engaged a consultant in 2007 to assist its
evaluation of the royalties to which Dr. Zandman would be entitled were his
employment to be terminated. Based in part upon the work of this consultant and
its own updated computations, management estimated that the present value of the
royalties to which Dr. Zandman would be entitled were his employment terminated
at December 31, 2008 would be between approximately $370 million and $445
million, with a possible tax gross-up if the royalities were payable in
connection with a change of control and deemed subject to an excise
tax. (This present value does not factor in any assessment of the
probability of payment.)
In
December 2008, Dr. Zandman approached the Compensation Committee with a proposal
to amend and restate his 2004 employment agreement. The Compensation
Committee engaged PricewaterhouseCoopers LLP and independent legal counsel to
assist the Committee in analyzing, responding to and, if appropriate,
negotiating the terms of Dr. Zandman’s proposal. Specifically,
PricewaterhouseCoopers was asked to review and assess the Company’s valuation,
based upon the work of its consultant, of the potential royalty payment amounts
under the 2004 Agreement and to advise the Committee generally with respect to
Dr. Zandman’s compensation package.
After
extensive analysis and negotiation with Dr. Zandman on the terms of his
proposal, on May 12, 2009, the Compensation Committee approved modifications to
the 2004 employment agreement and recommended its approval to the full board of
directors. The Compensation Committee determined that the
modifications were in the best interests of the Company and its stockholders,
because they eliminated the substantial contingent liability represented by the
royalty payments, including a possible gross up if the royalties became payable
in connection with a change of control and were deemed subject to Section 4999
of the Internal Revenue Code. The possible consequences of this
contingent liability for potential strategic alternatives available to the
Company were deemed of particular concern at this time in light of the
unprecedented disruption now being experienced in the global
markets. The modifications to Dr. Zandman’s employment agreement were
not considered and approved, however, in response to any specific transaction
currently under consideration by the Company.
The
amended and restated employment agreement was approved by the board upon
recommendation of the Compensation Committee on May 13, 2009 and became
effective as of that date. The modifications to the 2004 employment
agreement include the following principal terms:
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Dr.
Zandman’s right to the royalty payments has been
terminated.
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Dr.
Zandman is entitled to a payment of $10 million as of the effective date
of the amended and restated agreement, to be followed by five successive
annual payments of $10 million.
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Payments
may be deferred with interest in the event that making such payment would
jeopardize the ability of the Company to continue as a going
concern.
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·
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Payments
will accelerate if, following a change of control of the Company, Dr.
Zandman is terminated without cause or if he terminates employment for
good reason. In the event of Dr. Zandman’s death or disability,
the unpaid annual installments would accelerate upon a change of control,
whether it occurs before or after the death or disability. If
an excise tax were imposed under Section 4999 of the Internal Revenue Code
due to the acceleration of the payments, the Company will reimburse Dr.
Zandman for the excise tax on customary
terms.
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·
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Absent
a change of control, if the Company were to terminate Dr. Zandman’s
employment without cause or Dr. Zandman were to terminate employment for
good reason or in the event of his death or disability, the unpaid annual
installment payments would not accelerate and would continue until
completed.
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Dr.
Zandman will forfeit future payments if he terminates his employment
without good reason or if his employment is terminated for
cause.
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Dr.
Zandman will not receive any other severance payments upon his termination
of employment for any reason.
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·
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Other
terms of the 2004 Agreement remain substantially the same. Dr.
Zandman continues to be subject to non-competition, non-solicitation,
non-disparagement and confidentiality
covenants.
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A copy of
Dr. Zandman’s amended employment agreement was filed as an exhibit to the
Company’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 13, 2009. The description of the terms of the
amended and restated employment agreement is qualified by reference to the Form
8-K filing.
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By
Order of the Board of Directors,
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/s/
William M. Clancy |
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William
M. Clancy
Corporate
Secretary
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Malvern,
Pennsylvania
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May
13, 2009
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