exhibit10-4.htm


     

     

     

     

    FORM OF EMPLOYEE MATTERS
AGREEMENT

     

    by and between

     

    VISHAY INTERTECHNOLOGY,
INC.

     

    and

     

    VISHAY PRECISION GROUP,
INC.

     

    Dated ______, 2010

     

     

     

     

     

     

     

     

     

    

    
    



    EMPLOYEE MATTERS AGREEMENT

     

         This EMPLOYEE MATTERS AGREEMENT (the “Agreement”) is entered into _____, 2010, by and between
Vishay Intertechnology,
Inc., a Delaware
corporation (“Vishay”), and Vishay Precision Group, Inc., a Delaware corporation (“VPG”) (each a “Party” and together the “Parties”).

     

    RECITALS

     

         WHEREAS, the Board
of Directors of Vishay has determined that it is appropriate and desirable to
separate Vishay and VPG into two publicly-traded companies by separating from
Vishay and transferring to VPG Vishay’s measurement and foil resistor
businesses, and related assets and liabilities; 

     

         WHEREAS, to
effectuate the distribution, the Parties entered into that certain Master
Separation and Distribution Agreement, dated as of _____, 2010 herewith (the
“Separation Agreement”);
and

     

         WHEREAS, pursuant
to the Separation Agreement, Vishay and VPG have agreed to enter into this
Agreement for the purpose of allocating between them assets, liabilities and
responsibilities with respect to employee compensation and benefit plans and
arrangements;

     

         NOW, THEREFORE, in
consideration of the foregoing premises, the mutual promises and covenants
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, agree as follows:

     

    ARTICLE I
DEFINITIONS AND INTERPRETATION 

     

         Section 1.1 Definitions. The following terms shall have the meanings
assigned in this Section:

     

         “Account Transfer Date” means, with respect to any Vishay Benefit
Plan, the date on which accounts, assets and liabilities of such Vishay Benefit
Plan are transferred to the corresponding VPG Benefit Plan. 

     

         “Action” means any claim, demand, action, suit,
counter-suit, arbitration, inquiry, proceeding or investigation by or before any
Governmental Authority and shall include any negotiations in settlement of or in
lieu of an Action. 

     

         “Agreement” means this Employee Matters
Agreement.

     

         “Applicable Law” means any applicable law, statute, rule or
regulation of any Governmental
Authority, or any outstanding order, judgment, injunction, ruling or decree by
any Governmental Authority. 

     

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         “Benefit Plan” means, with respect to an entity, each plan,
program, policy, on-going arrangement, agreement, payroll practice, contract,
insurance policy or commitment that is an employment, consulting,
non-competition or deferred compensation agreement, or an executive
compensation, incentive bonus, pension, profit-sharing, savings, retirement,
supplemental retirement, stock option, restricted stock unit, phantom stock,
other equity-based compensation, severance pay, life, health, hospitalization,
sick leave, vacation pay, disability or accident insurance plan or other
employee benefit plan, program, arrangement, agreement or commitment that covers
employees sponsored or maintained by such entity.

     

         “COBRA” means the continuation coverage requirements
for “group health plans” pursuant to Code Section 4980B and ERISA Sections 601
through 608. 

     

         “COBRA Beneficiary” means an individual who is receiving or who
is entitled to receive COBRA coverage. 

     

         “Code” means the Internal Revenue Code of 1986, as
amended, including any proposed, temporary or final regulation and other
regulatory guidance in force under that provision.

     

         “Contract” means any contract, agreement, lease,
purchase and/or commitment, license, consensual obligation, promise or
undertaking (whether written or oral and whether express or implied) that is
legally binding on any Person or any part of its property under Applicable Law,
including all claims or rights against any Person, choses in action and similar
rights, whether accrued or contingent with respect to any such contract,
agreement, lease, purchase and/or commitment, license, consensual obligation,
promise or undertaking, but excluding this Agreement and the Separation
Agreement, save as otherwise expressly provided in this Agreement or in the
Separation Agreement. 

     

         “Distribution” means the distribution of all of the
outstanding shares of VPG Common Stock and VPG Class B Common Stock to the
holders of Vishay Common Stock and Vishay Class B Common Stock,
respectively.

     

         “Distribution Date” means the date determined by the Board of
Directors of Vishay as the date on which the Distribution shall be effected.


     

         “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended, including any proposed, temporary or final
regulation and other regulatory guidance in force under that
provision.

     

          “Existing VPG Benefit Plans” means the Benefit Plans sponsored or
maintained by members of the VPG Group in the United States as of December 31,
2009 which are listed on Schedule A to this Agreement. 

     

         “FSA Plan” means a health care flexible spending
account plan or dependent care flexible spending account plan. 

     

         “Governmental Authority” means any U.S. or non-U.S. federal, state,
local, foreign or international court, arbitration or mediation tribunal,
government, department, commission, board, bureau, agency, official or other
regulatory, administrative or governmental authority. 

     

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         “Group” means the Vishay Group or the VPG Group, as
the context requires. 

     

         “Health and Welfare Plans” means benefit plans providing health, life,
dental, vision, prescription drug, short-term disability, long-term disability,
and/or educational assistance coverage. 

     

         “Liability” means, with respect to any Person, any and
all losses, claims, charges, debts, demands, actions, causes of action, suits,
damages, obligations, payments, costs and expenses, sums of money, accounts,
reckonings, bonds, specialties, indemnities and similar obligations, exoneration
covenants, obligations under Contracts, controversies, doings, omissions,
variances, guarantees, make whole agreements and similar obligations, and other
liabilities and requirements, including all contractual obligations, whether
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, joint or several, whenever arising, and
including those arising under any Applicable Law, Action, threatened or
contemplated Action (including the costs and expenses of demands, assessments,
judgments, settlements and compromises relating thereto and attorneys’ fees and
any and all costs and expenses, whatsoever reasonably incurred in investigating,
preparing or defending against any such Actions or threatened or contemplated
Actions) or order of any Governmental Authority or any award of any arbitrator
or mediator of any kind, and those arising under any Contract, in each case,
whether or not recorded or reflected or otherwise disclosed or required to be
recorded or reflected or otherwise disclosed, on the books and records or
financial statements of any Person, including any Liability for
Taxes.

     

         “Measurement Group” means Vishay Measurements Group, Inc., a
Wholly-owned Subsidiary of VPG. 

     

         “MGF Business” means the measurements and foil resistor
business owned and operated, indirectly or directly, by Vishay prior to the
Distribution, to be owned and operated, directly or indirectly, by VPG after the
Distribution. 

     

         “Parties” shall have the meaning assigned thereto in
the preamble to this Agreement.

     

         “Per Share Market Value” has the meaning assigned thereto in Section
5.2. 

     

         “Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization or a Governmental
Authority. 

     

         “QDRO” has the meaning assigned thereto in Section
3.1(c). 

     

         “Separation” means the multi-step process described in
Article II of the Separation Agreement by which the MGF Business shall be
transferred, directly or indirectly, from Vishay and members of the Vishay Group
to VPG and members of the VPG Group. 

     

         “Separation Agreement” has the meaning assigned thereto in the
recitals to this Agreement.

     

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         “Subsidiary” of any Person means a corporation or other
organization whether incorporated or unincorporated of which at least a majority
of the securities or interests having by the terms thereof ordinary voting power
to elect at least a majority of the board of directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such Person or by any one or more
of its Subsidiaries, or by such Person and one or more of its Subsidiaries;
provided, however, that no Person that is not directly or
indirectly wholly-owned by any other Person shall be a Subsidiary of such other
Person unless such other Person controls, or has the right, power or ability to
control, that Person. 

     

         “Taxes” has the meaning set forth in the Tax Sharing
Agreement, substantially in the form set forth as Exhibit E to the Separation
Agreement. 

     

         “Transfer Date” means, with respect to any Vishay Employee,
the date such Vishay Employee becomes a VPG Employee. In the case of employees
of the Measurements Group who participated in any Vishay Benefit Plans and who
cease to participate in such Vishay Benefit Plans and commence participation in
the corresponding VPG Benefit Plans, the date of such transfer to VPG Benefit
Plans shall be treated as such individuals’ Transfer Date.

     

         “Vishay” has the meaning assigned thereto in the
preamble to this Agreement.

     

         “Vishay 401(k) Plan” means the Vishay Employee Savings Plus Plan.


     

         “Vishay Benefit Plan” means, at any relevant time, any Benefit
Plan sponsored, maintained or contributed to by any member of the Vishay Group.


     

         “Vishay Class B Common Stock” means the outstanding shares of Class B
common stock, $0.10 par value, of Vishay. 

     

         “Vishay Common Stock” means the outstanding shares of common
stock, $0.10 par value, of Vishay.

     

         “Vishay Employee” means any individual who, at the relevant
time, is, or is expected to be, employed by Vishay or any member of the Vishay
Group, including active employees and employees on vacation and approved leave
of absence (including maternity, paternity, family, sick leave, qualified
military service under the Uniformed Services Employment and Reemployment Rights
Act of 1994, short- or long-term disability leave, leave under the Family
Medical Leave Act and other approved leave).

     

         “Vishay FSA Plan” has the meaning assigned thereto in Section
4.2(a).

     

         “Vishay Group” means Vishay and each Subsidiary of Vishay
and each other Person that is or is anticipated to be controlled directly or
indirectly by Vishay immediately after the Distribution, provided that the Vishay Group shall not include any
member of the VPG Group. 

     

         “Vishay KEWAP” means the Vishay Intertechnology, Inc.
Deferred Compensation Plan, also referred to as the Vishay Key Employee Wealth
Accumulation Plan. 

     

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         “Vishay NQDB Plan” means the Vishay Non-qualified Retirement
Plan. 

     

         “Vishay Participant” means a participant in a Vishay Benefit Plan
who, at the relevant time, is (i) a Vishay Employee, (ii) a former Vishay
Employee who is not a VPG Employee, or (iii) a beneficiary, dependent or
alternate payee of any of the foregoing.

     

         “Vishay Retirement Plan” means The Vishay Retirement Plan, a
qualified, defined benefit plan.

     

         “Vishay Service
Programs/Policies” means,
collectively, the Vishay vacation, short-term disability and other Vishay
programs and policies to the extent eligibility for or the level of benefits
thereunder depends on length of service.

     

         “Vishay Welfare Plan” has the meaning assigned thereto in Section
4.1(a).

     

         “VPG” has the meaning assigned thereto in the
preamble to this Agreement.

     

         “VPG 401(k) Plan” has the meaning assigned thereto in Section
3.1(b).

     

         “VPG Benefit Plan” means any Benefit Plan sponsored, maintained
or contributed to by any member of the VPG Group.

     

         “VPG Class B Common Stock” means the outstanding shares of Class B
common stock, $0.10 par value, of VPG. 

     

         “VPG Common Stock” means the outstanding shares of common
stock, $0.10 par value, of VPG.

     

         “VPG Employee” means any individual who, at the relevant
time, is employed by VPG or any member of the VPG Group, including active
employees and employees on vacation and approved leave of absence (including
maternity, paternity, family, sick leave, qualified military service under the
Uniformed Services Employment and Reemployment Rights Act of 1994, short- or
long-term disability leave, leave under the Family Medical Leave Act and other
approved leave).

     

         “VPG FSA Plans” has the meaning assigned thereto in Section
4.2(b).

     

         “VPG Group” means VPG and each Subsidiary of VPG and
each other Person that is or is anticipated to be controlled directly or
indirectly by VPG immediately after the Distribution. 

     

         “VPG KEWAP” has the meaning assigned thereto in Section
3.2(b).

     

         “VPG NQDP Plan” has the meaning assigned thereto in Section
3.4(b). 

     

         “VPG Participant” means any individual who, at the relevant
time, is (i) a VPG Employee or (ii) a beneficiary, dependent or alternate payee
of a VPG Employee.

     

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         “VPG Service
Programs/Policies” means,
collectively, the VPG vacation, short-term disability and other VPG programs and
policies to the extent eligibility for or the level of benefits thereunder
depends on length of service.

     

          “VPG Stock Incentive Program” means the Vishay Precision Group, Inc. 2010
Stock Incentive Program. 

     

         “VPG Welfare Plan” has the meaning assigned thereto in Section
4.1(b). 

     

         “Wholly-owned Subsidiary” of a Person means a Subsidiary of that
Person substantially all of whose voting securities and outstanding equity
interest are owned either directly or indirectly by such Person or one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries.


     

    ARTICLE II
GENERAL
PRINCIPLES

     

         Section 2.1 Transfer of Employees. Prior to the Distribution Date, to the
extent not previously transferred, all Vishay Employees that are or as of the
Distribution Date are expected to be, primarily employed in the MGF Business, as
well as any other Vishay Employees that Vishay and VPG determine should become
VPG Employees, shall be transferred to the VPG Group, it being acknowledged that
most such employees who were not previously employed by the VPG Group were
transferred effective January 1, 2010. Notwithstanding the foregoing, any such
employees who are on an approved leave of absence (including maternity,
paternity, family, sick leave, qualified military service under the Uniformed
Services Employment and Reemployment Rights Act of 1994, short-term or long-term
disability leave, leave under the Family Medical Leave Act and other approved
leave) prior to and as of the Distribution Date shall not be transferred to VPG
or a member of the VPG Group unless and until they return to work. Such transfer
shall not be treated as a separation from service for purposes of any Vishay
Benefit Plan or any agreement (or any benefit thereunder) which is subject to
the provisions of Section 409A of the Code.

     

         Section 2.2 Assumption and Retention of
Liabilities. 

     

              (a) As of the Distribution Date, except as otherwise expressly provided for
in this Agreement or any other agreement by and between the Parties, and/or
their Affiliates, Vishay shall, or shall cause one or more other members of the
Vishay Group to, retain and Vishay hereby agrees to pay, perform, fulfill and
discharge, in due course in full: (i) all Liabilities under all Vishay Benefit
Plans with respect to the Vishay Employees; and (ii) any other Liabilities or
obligations expressly assigned to Vishay or any other member of the Vishay Group
under this Agreement.

     

              (b) From time to time after the Distribution Date, VPG shall promptly
reimburse Vishay, upon Vishay’s reasonable request and the presentation by
Vishay of such substantiating documentation as VPG shall reasonably request, for
the cost of any obligations or Liabilities satisfied or assumed by Vishay or the
Vishay Group following the Distribution Date that are, or that have been made
pursuant to this Agreement, the responsibility of VPG or the VPG Group. Except
as otherwise provided in this Agreement, any such request for reimbursement must be made by Vishay not later
than the first anniversary of the Distribution Date, unless the obligations and
Liabilities extend beyond the first anniversary.

     

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              (c) From time to time after the Distribution Date, Vishay shall promptly
reimburse VPG, upon VPG’s reasonable request and the presentation by VPG of such
substantiating documentation as Vishay shall reasonably request, for the cost of
any Liabilities satisfied or assumed following the Distribution Date by VPG or
the VPG Group that are, or that have been made pursuant to this Agreement, the
responsibility of Vishay or the Vishay Group. Except as otherwise provided in
this Agreement, any such request for reimbursement must be made by VPG not later
than the first anniversary of the Distribution Date, unless the obligations and
Liabilities extend beyond the first anniversary.

     

          Section 2.3 Existing VPG Benefit Plans. Anything to the contrary in this Agreement
notwithstanding, if a VPG Employee is a participant in an Existing VPG Benefit
Plan, including without limitation any Benefit Plan sponsored or maintained by
Measurements Group, then VPG or another member of the VPG Group may either
continue the participation of the VPG   Employee in such Existing
VPG Benefit Plan or transfer participation of the VPG Employee, and the assets
attributable to the VPG Employee’s participation in such plan, to a comparable
VPG Benefit Plan contemplated by this Agreement, provided that the comparable
VPG Benefit Plan shall have terms and conditions no less favorable to the VPG
Employee than under the Existing VPG Benefit Plan. Except to the extent of
transfers of participation contemplated in the previous sentence, all Existing
VPG Benefit Plans, including Benefit Plans sponsored or maintained by
Measurements Group, shall continue in effect as of the Distribution Date, and no
changes in any such Benefit Plans shall be made on account of the
Distribution. 

     

         Section 2.4 VPG Employee Participation in Vishay Benefit
Plans. Except as otherwise
expressly provided for in this Agreement or as otherwise expressly agreed to in
writing between the Parties, each Vishay Employee who becomes a VPG Employee
shall cease to actively participate in, be covered by, accrue benefits under, be
eligible to contribute to or have any rights as an active participant under any
Vishay Benefit Plan effective as of a date on or after such VPG employee’s
Transfer Date, but in no event later than the Distribution Date. 

     

         Section 2.5 Service Credit. VPG, directly or through one or more other
members of the VPG Group, shall cause the VPG Service Programs/Policies and the
VPG Benefit Plans to provide each Vishay Employee who becomes a VPG Employee
credit for all purposes, including eligibility, vesting, determination of
benefit levels, and benefit accruals under the applicable VPG Service
Programs/Policies and VPG Benefit Plans for such VPG Employee’s service with any
member of the Vishay Group to the same extent such service was recognized by the
corresponding Vishay Service Programs/Policies and Vishay Benefit Plans;
provided that such service shall not be recognized to the extent that such
recognition would result in the duplication of benefits.

     

         Section 2.6 Vacation and Other Time-Off
Benefits. VPG or another
applicable member of the VPG Group shall credit each individual who becomes a
VPG Employee on or before the Distribution Date with the amount of accrued but
unused vacation time and other time-off benefits as such VPG Employee had with
the Vishay Group on the applicable Transfer Date. The VPG Employees for whom VPG
provides vacation and other time-off credits as described above shall not have a right to a cash payment for their
accrued but unused vacation time (including banked vacation time) or other
time-off benefits as a result of their ceasing to be Vishay Employees.


     

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         Section 2.7 Measurements Group
Employees. Employees of
the Measurements Group that participated in any Vishay Benefit Plans will cease
to participate in such Vishay Benefit Plans and commence participation in the
corresponding VPG Benefit Plans as of or on a date prior to the Distribution
Date, and such date shall be treated as such individuals’ Transfer Date for the
purpose of this transfer to the VPG Benefit Plans. 

     

    ARTICLE III
RETIREMENT
PLANS

     

         Section 3.1 401(k) Plans. 

     

              (a) Vishay 401(k) Plan. Except as provided in Section 3.1(c) below,
following the Distribution Date the Vishay Group shall retain all obligations
and Liabilities under, or with respect to, the Vishay 401(k) Plan. 

     

              (b) VPG 401(k) Plan. Effective on or about March 1, 2010, VPG
has, or has caused another member of the VPG Group to, establish a qualified
defined contribution retirement plan and trust for the benefit of VPG
Participants (the “VPG 401(k) Plan”). VPG shall be responsible for taking all
necessary, reasonable and appropriate action to maintain and administer the VPG
401(k) Plan so that it is qualified under Code Section 401(a) and the trust
thereunder is and continues to be exempt under Code Section 501(a). VPG (acting
directly or through other members of the VPG Group) shall be responsible for any
and all Liabilities and other obligations with respect to the VPG 401(k) Plan.
As of the date of the establishment of the VPG 401(k) Plan and through the
Distribution Date, the VPG 401(k) Plan shall include terms that are
substantially the same as the terms of the Vishay 401(k) Plan. 

     

              (c) Transfer of Vishay 401(k) Plan
Assets. On an Account
Transfer Date within a reasonable period of time before the Distribution Date,
Vishay shall cause the accounts and underlying assets and Liabilities (including
any outstanding loan balances and any qualified domestic relations orders
(“QDROs”)) in the Vishay 401(k) Plan attributable to
VPG Employees who are employed by VPG as of the Account Transfer Date and all of
the assets in the Vishay 401(k) Plan trust related thereto to be transferred
(based on the investments in place on or as soon as administratively practicable
before the Account Transfer Date) to the VPG 401(k) Plan, and VPG shall cause
the VPG 401(k) Plan and trust to accept such transfer of accounts and underlying
assets, Liabilities, loans and QDROs. Effective as of the date of such transfer,
VPG shall cause the VPG 401(k) Plan to assume and to fully perform, pay and
discharge all obligations of the Vishay 401(k) Plan relating to the accounts of
VPG Participants as of the Account Transfer Date, to the extent the assets,
liabilities, loans and QDROs related to those accounts are actually transferred
from the Vishay 401(k) Plan to the VPG 401(k) Plan, and the VPG 401(k) Plan
shall satisfy all protected benefit requirements under the Code, ERISA and
Applicable Law with respect to the transferred accounts. The transfer of assets
shall be conducted in accordance with Code Section 414(l), Treasury Regulation
Section 1.414(1)-1, and ERISA Section 208. The Vishay 401(k) Plan accounts of
individuals who become VPG Employees
after the Account Transfer Date shall be governed by the terms of the Vishay
401(k) Plan.

     

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              (d) Continuation of Elections. The VPG 401(k) Plan shall recognize and
maintain Vishay 401(k) Plan elections or designations, including participant
deferral elections, investment elections, beneficiary designations, and the
rights of alternate payees under QDROs with respect to VPG Participants, to the
extent such elections or designations are available under the VPG 401(k) Plan
and continued pursuant to procedures adopted under the VPG 401(k) Plan.


     

              (e) Contributions through the Account Transfer
Date. All contributions,
including employer matching contributions, payable to the Vishay 401(k) Plan
through the applicable Transfer Date with respect to employee deferrals and
contributions for Vishay Employees who become VPG Employees on or before the
Account Transfer Date, determined in accordance with the terms and provisions of
the Vishay 401(k) Plan, ERISA and the Code, shall be paid by Vishay or another
member of the Vishay Group to the Vishay 401(k) Plan prior to the Account
Transfer Date. 

     

         Section 3.2 KEWAPs.

     

              (a) Vishay Key Employee Wealth Accumulation
Plan. Except as provided
in Section 3.2(c) below, following the Distribution Date the Vishay Group shall
retain all obligations and Liabilities under, or with respect to, the Vishay
KEWAP.

     

               (b) VPG Key Employee Wealth Accumulation
Plan. Effective on or
about January 1, 2010, VPG has, or has caused another member of the VPG Group
to, establish a non-qualified deferred compensation plan (the “VPG KEWAP  ”) to benefit, on a
prospective basis, VPG Employees who participated in the Vishay KEWAP
immediately prior to their transfer to the VPG Group and other eligible VPG
Employees. Effective prior to the Distribution Date, VPG will, or will cause
another member of the VPG Group to, establish a rabbi trust with respect to the
VPG KEWAP. 

     

              (c) Transfer of Vishay KEWAP Accounts and Rabbi
Trust Amounts. On an
Account Transfer Date within a reasonable period of time before the Distribution
Date, Vishay shall cause the accounts in the Vishay KEWAP attributable to VPG
Employees who are employed as of the Account Transfer Date and the amounts in
the Vishay KEWAP rabbi trust related thereto to be transferred (based on the
investments in place on or as soon as administratively practicable before the
Account Transfer Date) to the VPG KEWAP. VPG shall cause the VPG KEWAP and the
VPG KEWAP rabbi trust to accept such transfer of accounts and associated amounts
and, effective as of the Account Transfer Date, to assume and to fully perform,
pay and discharge all obligations of the Vishay KEWAP relating to the accounts
of VPG Participants as of the Account Transfer Date, to the extent the amounts
related to those accounts are actually transferred from the Vishay KEWAP to the
VPG KEWAP. The account balances in the Vishay KEWAP of any Vishay Employee or
former Vishay Employee who becomes a VPG Employee after the Account Transfer
Date, shall remain in the Vishay KEWAP, and shall continue to be governed by the
terms of the Vishay KEWAP. 

     

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              (d) Continuation of Elections. The VPG KEWAP will recognize and maintain
Vishay KEWAP elections or designations, including participant deferral elections
(to the extent possible), investment elections, beneficiary designations, and
the rights of alternate payees under QDROs with respect to VPG Employees, to the
extent such elections or designations are available under the VPG KEWAP and
continued pursuant to procedures adopted under the VPG KEWAP. 

     

              (e) Credits and Contributions through the Transfer
Date. All amounts
scheduled to be credited to the Vishay KEWAP and contributed to the related
rabbi trust through the applicable Transfer Date with respect to Vishay
Employees who become VPG Employees on or before the Account Transfer Date,
determined in accordance with the terms and provisions of the Vishay KEWAP,
ERISA and the Code, shall be credited and paid by Vishay or another member of
the Vishay Group to the Vishay KEWAP and the related rabbi trust prior to the
Account Transfer Date. 

     

         Section 3.3 Vishay Retirement Plan. Following the Distribution Date, the Vishay
Group shall retain all obligations and Liabilities under, or with respect to,
the Vishay Retirement Plan. Any accrued benefits of VPG Employees under Vishay
Retirement Plan shall remain with the Vishay Retirement Plan and shall be
governed by the terms and conditions of the Vishay Retirement Plan. Vishay
Employees who separate from service with the Vishay Group to become VPG
Employees shall become eligible for distribution of their benefits under the
Vishay Retirement Plan in accordance with that plan’s terms and administrative
procedures. The Vishay Group shall be responsible for any notices, forms and
filings that are required to be furnished to a governmental agency as a result
of the Distribution.

     

         Section 3.4 NQDB Plans.

     

              (a) Vishay NQDB Plan. Except as provided in Section 3.4(c) below,
following the Distribution Date the Vishay Group shall retain all obligations
and Liabilities under, or with respect to, the Vishay NQDB Plan.

     

               (b) VPG NQDB Plan. Effective as of January 1, 2010, VPG
established a non-qualified defined benefit retirement plan (the “VPG NQDB
Plan”) to maintain the accounts of VPG Participants who had accounts in the
Vishay NQDB Plan immediately prior to the Distribution Date. Effective prior to
the Distribution Date, VPG will, or will cause another member of the VPG Group
to, establish a rabbi trust with respect to the VPG NQDB
Plan.  

     

              (c) Transfer of Vishay NQDB Plan Accounts and
Rabbi Trust Amounts. On an
Account Transfer Date within a reasonable period of time before the Distribution
Date, Vishay shall cause the accounts in the Vishay NQDB Plan attributable to
VPG Employees who are employed by the VPG Group as of the Account Transfer Date
and the amounts in the Vishay NQDB Plan rabbi trust related thereto to be
transferred (based on the investments in place on or as soon as administratively
practicable before the Account Transfer Date) to the VPG NQDB Plan. VPG shall
cause the VPG NQDB Plan and the VPG NQDB Plan rabbi trust to accept such
transfer of accounts and associated amounts and, effective as of the Account
Transfer Date, to assume and to fully perform, pay and discharge all obligations
of the Vishay NQDB Plan relating to the accounts of VPG Participants as of the
Account Transfer Date, to the extent the amounts related to those accounts are actually
transferred from the Vishay NQDB Plan to the VPG NQDB Plan. The account balances
in the Vishay NQDB Plan of Vishay Employees or former Vishay Employees who
become VPG Employees after the Account Transfer Date shall remain in the Vishay
NQDB Plan, and shall continue to be governed by the terms of the Vishay NQDB
Plan. 

     

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    ARTICLE IV
HEALTH AND WELFARE PLANS

     

         Section 4.1 VPG Welfare Plans.

     

              (a) Vishay Welfare Plan. Following the Distribution Date, the Vishay
Group shall retain all obligations and Liabilities under, or with respect to,
the Health and Welfare Benefit Plans maintained for the benefit of Vishay
Employees (the “Vishay
Welfare Plans”). 

     

              (b) Establishment of VPG Welfare
Plans. Effective as of or
before the Distribution Date, VPG will, or will cause or a member of the VPG
Group to, establish one or more Health and Welfare Benefit Plans for the benefit
of eligible VPG Participants (the “VPG Welfare Plans”), who, as of the date of their transfer to
the VPG Group, are participants in the Vishay Welfare Plans. The VPG Welfare
Plans shall provide health, life, dental, vision, prescription drug, short-term
disability, long-term disability, and educational assistance coverage benefits
prior to and as of the Distribution Date on terms substantially the same as are
provided under the Vishay Welfare Plans. 

     

              (c) Terms of Participation in VPG Welfare
Plans. The VPG Welfare
Plans shall (i) waive all limitations as to preexisting conditions, exclusions,
and service conditions with respect to participation and coverage requirements
applicable to VPG Employees, other than limitations that were in effect with
respect to participants as of the applicable Transfer Date under the
corresponding Vishay Welfare Plan, (ii) waive any waiting period limitation or
evidence of insurability requirement that would otherwise be applicable to a VPG
Employee following the applicable Transfer Date to the extent such VPG
Participant had satisfied any similar limitation under the corresponding Vishay
Welfare Plan, and (iii) honor any deductibles, out-of-pocket maximums and
co-payments incurred by VPG Employees under the corresponding Vishay Welfare
Plan in satisfaction of the applicable deductibles, out-of-pocket expenses or
co-payments under such Vishay Welfare Plan for calendar year 2010. 

     

         Section 4.2 FSA Plans. 

     

              (a) Vishay FSA Plans. Except as provided in Section 4.2(c) below,
following the Distribution Date the Vishay Group shall retain all obligations
and Liabilities under, or with respect to, the FSA Plans of the Vishay Group
(the “Vishay FSA Plans”). 

     

              (b) VPG FSA Plans. Effective as of January 1, 2010, VPG has, or
has caused another member of the VPG Group to, establish one or more health care
and dependent care FSA Plans (the “VPG FSA Plans”). The VPG FSA Plans shall provide benefits
prior to and as of the Distribution Date that are substantially the same as
provided under the Vishay FSA Plans. 

     

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              (c) To the extent that the Transfer Date of a VPG Employee occurs between
January 1, 2010 and the Distribution Date, the VPG FSA Plans shall reimburse
medical expenses incurred by the VPG Employees at any time during the Vishay FSA
Plans’ plan year (including claims incurred but unpaid prior to the Distribution
Date), up to the amount of the individual’s election and reduced by amounts
previously reimbursed by the corresponding Vishay FSA Plan. The debit and credit
account balances, if any, of any such VPG Employee under the Vishay FSA Plans
shall be transferred within a reasonable period prior to the Distribution Date
to the VPG FSA Plans and shall thereafter be administered in accordance with the
terms of the VPG FSA Plans. If a VPG Employee whose account is transferred to
the VPG FSA Plans receives reimbursements that exceed the amount he or she has
contributed under the corresponding Vishay FSA Plan as of the applicable
Transfer Date, irrespective of whether such payment was made before or after
such Transfer Date, VPG or another member of the VPG Group shall collect that
VPG Employee’s payroll contributions in accordance with the VPG FSA Plans’
procedures and remit them on a monthly basis to Vishay until Vishay has recouped
the total reimbursements paid to or for that VPG Employee under the applicable
Vishay FSA Plan for the year; provided that such contributions and remittances shall
cease upon the VPG Employee’s cessation of participation in the applicable VPG
FSA Plan. Balances in any Vishay FSA Plan of any Vishay Employee who becomes a
VPG Employee after the Distribution Date will not be transferred to the
corresponding VPG FSA Plan and will be treated in accordance with the terms and
procedures of the Vishay FSA Plans. 

     

         Section 4.3 Claims. 

     

              (a) General. Vishay, acting directly or through any other
member of the Vishay Group, shall cause each Vishay Welfare Plan to fully
perform, pay and discharge, within the timeframes applicable under such plan,
all claims that arise with respect to VPG Participants under the Vishay Welfare
Plan until the applicable Transfer Date and (ii) VPG, acting directly or through
any other member of VPG Group, shall cause the corresponding VPG Welfare Plan to
fully perform, pay and discharge, within the timeframes applicable under such
plan, all claims that arise under such VPG Welfare Plan on and after the
applicable Transfer Date.

     

              (b) Claim Arisen Definition. For purposes of this Section 4.3, a claim is
deemed to arise (i) with respect to medical, dental and/or vision benefits, upon
the rendering of health services giving rise to such claim; (ii) with respect to
prescription drug benefits, upon the purchase of the prescription drug; (iii)
with respect to disability benefits, upon the date of an individual’s
disability, as determined by the disability benefit insurance carrier or claim
administrator, giving rise to such claim; (iv) with respect to a period of
continuous hospitalization, upon the date of admission to the hospital; and (v)
with respect to death benefits, on the date of death.

     

         Section 4.4 Advances. VPG shall reimburse Vishay for the amount of
any advances made by Vishay or any other member of the Vishay Group prior to the
applicable Transfer Date under any Benefit Plan or otherwise to the extent that
such advance relates to service on or after the applicable Transfer Date or that
under the terms of the Agreement is a Liability of the VPG Group. 

     

         Section 4.5 Workers’ Compensation
Liabilities. 

     

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              (a) Pre-Transfer Claims. The VPG Group shall be responsible for any
workers’ compensation Liability up to the amount accrued on its balance sheet on
the Transfer Date. The VPG Group shall not assume, retain or otherwise be
responsible for any workers' compensation Liability in excess of the amount
accrued relating to, arising out of, or resulting from a compensable injury or
disease of a VPG employee before the applicable Transfer Date. 

     

              (b) Post- Transfer Claims. All workers’ compensation Liabilities
relating to, arising out of, or resulting from any compensable injury or
occupational disease of a VPG Employee occurring on or after the applicable
Transfer Date shall be the responsibility of the VPG Group. 

     

              (c) General. For purposes of this Section 4.6, a
compensable injury shall be deemed to occur upon the occurrence of the event
giving rise to eligibility for workers’ compensation benefits and an occupation
disease shall be deemed to occur when it first becomes manifest. Vishay and VPG
shall cooperate in good faith with respect to the notification to appropriate
Governmental Authorities in order to facilitate the issuance of new, or the
transfer of existing, workers’ compensation insurance policies and claims
handling contracts occasioned by reason of the separation. 

     

    ARTICLE V
EQUITY AWARDS

     

         Section 5.1 Approval of VPG Plan by Vishay as Majority
Shareholder. Effective
prior to the Distribution Date, VPG shall adopt the VPG Stock Incentive Program.
Vishay, as VPG’s sole shareholder, shall approve the VPG Stock Incentive Program
prior to the Distribution Date. Vishay shall, or shall cause VPG to, register
all shares of VPG Common Stock issuable under the VPG Stock Incentive Program on
Form S-8 (or any successor form promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended) prior to the
Distribution Date. 

     

         Section 5.2 Phantom Stock and Restricted Stock
Units.

     

               (a) Number of Shares. Effective as of the Separation, Vishay shall
amend each outstanding grant of phantom stock granted pursuant to the Vishay
Intertechnology Inc. Senior Executive Phantom Stock Plan and each outstanding
grant of restricted stock units (both those subject to ordinary vesting and
those restricted stock units subject to performance-based vesting, sometimes
referred to as performance stock units) granted pursuant to the Vishay
Intertechnology, Inc. 2007 Stock Incentive Program, as amended and restated
effective April 2008, to increase the number of shares of phantom stock and the
number of restricted stock units applicable to such grants. The aggregate number
of shares of phantom stock and restricted stock units outstanding following the
Separation shall be determined according to the following
formula: 

     

              NVs = NV x [1 + r x PMs / PVs],

     

    where

     

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      	        	NVs	      	
              is the number of
      shares of Vishay Common Stock underlying the restricted stock units or
      phantom shares following the Distribution Date;

            
	
            	
            	
            	 
	
            	NV	
            	
              is the number of
      shares Vishay Common Stock underlying the restricted stock units
      or phantom shares prior to
      the Distribution Date;

            
	
            	
            	
            	 
	
            	PMs	
            	
              is the Per Share
      Market Value of VPG Common Stock following the Distribution Date;

            
	
            	
            	
            	 
	
            	PVs	
            	
              is the Per Share
      Market Value of Vishay Common Stock following the Distribution Date;
      and

            
	
            	
            	
            	 
	
            	r	
            	
              is the
      distribution ratio for the
Distribution.

            


    

     

    “Per Share Market Value” of the VPG Common Stock or the Vishay Common
Stock means the average Daily Market Price of the respective security for the
first ten (10) consecutive trading days following the Distribution Date.
“Daily Market Price” for a security on any trading day means the
volume-weighted average of the per share selling prices of the security on the
New York Stock Exchange or other principal United States securities exchange or
inter-dealer quotation system on which the security is then listed or quoted;
or, if there are no reported sales of the security on a trading day, the average
of the high bid and low ask price for the security on such trading day; or, if
there are no high bid and low ask prices on such trading day, the Daily Market
Price shall be the per share fair market value of the security as determined by
the board of directors of the issuer of the security in good faith.


     

               (b) Performance Goals  . Effective as of the
Separation, Vishay shall amend each outstanding grant of performance stock units
(restricted stock units that are subject to performance-based vesting) granted
pursuant to the Vishay Intertechnology, Inc. 2007 Stock Incentive Program, as
amended and restated effective April 2008, to reduce by 10% the numeric value of
each applicable performance goal that applies to periods following the
Separation. 

     

         Section 5.3 Stock Options. 

     

             
(a) Stock Options Held by Vishay
Employees. Effective as of
the Distribution Date, Vishay
will amend each outstanding grant of stock options made pursuant to the Vishay
Intertechnology, Inc. 1998 Stock Option Program, the Vishay Intertechnology,
Inc. 2007 Stock Incentive Program, as amended and restated effective April 2008,
and the Amended and Restated 1998 Long-Term Incentive Plan of General
Semiconductor, Inc. to reduce the exercise price of each of the stock options
and increase the number of shares issuable upon exercise of each of the stock
options according to the following formulas:

     

              EVs = EV x PVs / (PVs + r x PPs)

     

              and

     

              NVs = NV x EV / EVs 

     

    where 

     

    
      	        	EV	      	
              is the per share
      exercise price of the Vishay stock option prior to the Distribution
      Date;

            


    

     

    14

     

    

    
    



    
      	        	NV	      	
              is the number of
      shares of Vishay Common Stock issuable upon exercise of the stock option
      prior to the Distribution Date;

            
	
            	
            	
            	 
	
            	EVs	
            	
              is the per share
      exercise price of the Vishay stock option following the Distribution
      Date;

            
	
            	
            	
            	 
	
            	PVs	
            	
              is the Per Share
      Market Value of Vishay Common Stock following the Distribution
      Date;

            
	
            	
            	
            	 
	
            	NVs	
            	
              is the number of
      shares of Vishay Common Stock issuable upon exercise of the stock option
      following the Distribution Date;

            
	
            	
            	
            	 
	
            	PPs	
            	
              is the Per Share
      Market Value of VPG Common Stock following the Distribution Date;
      and

            
	
            	
            	
            	 
	
            	r	 	
              is the
      distribution ratio for the
Distribution.

            


    

     

    The other terms of the
Vishay stock options, including their remaining vesting schedule if any, shall
remain the same. 

     

         (b) Stock Options Held by VPG
Employees. Effective as of
the separation, VPG shall issue to VPG Employees who hold unvested Vishay stock
options that will be forfeited as a result of the Distribution stock options
under the VPG Stock Incentive Program in lieu of their Vishay stock options. In
addition, VPG shall offer to VPG Employees who hold vested Vishay stock options
the opportunity to replace those options with VPG stock options. In either case,
the exercise price of each of the VPG stock options and the number of shares of
VPG Common Stock issuable upon exercise of each of the stock options shall be
determined according to the following formulas:

     

              EPs = EV x PPs /(PVs + (r x PPs)) 

     

              and

     

              NPs = NV x EV / EPs

     

    where 

     

    
      	        	EPs	      	
              is the per share
      exercise price of the option to purchase VPG Common
  Stock;

            
	
            	
            	
            	 
	
            	NPs	
            	
              is the number of
      shares of VPG Common Stock issuable upon exercise of the stock
      .option;
  and

            


    

     

    the other symbols have
the same values as those assigned above with respect to the formulas for
treatment of Vishay stock options.

     

    The other terms of the
VPG stock options shall be the same as the Vishay stock options that they are
intended to replace. In the case of VPG stock options issued in lieu of
forfeited Vishay stock options, the vesting schedule for the VPG stock options
shall be the same as the remaining vesting schedule of the forfeited Vishay
stock options. If the exercise price of any VPG stock options is less than the
market value of VPG Common Stock on the date the stock options are issued, VPG may issue the VPG stock options
according to a different formula in order to comply with regulations under
Section 409A of the Code. 

     

    15

     

    

    
    



    ARTICLE VI
NON-U.S. EMPLOYEES AND BENEFITS

     

          As of or prior to the Distribution Date, to the
extent not previously transferred, all Vishay Employees that are resident
outside of the United States or otherwise are subject to non-U.S. law that are
or as of the Distribution Date are expected to be primarily employed in the MGF
Business, as well as any other such Vishay Employees that Vishay and VPG
determine should become VPG Employees shall be transferred to the VPG Group.
Such transfers, as well as the transfer of any related liabilities and Benefit
Plans or accounts under Benefit Plans, will be accomplished in accordance with
applicable law and custom in each location where such Vishay Employees are
located. To the extent known as of the date of this Agreement, Schedule B hereto
sets forth the actions that shall be taken in furtherance of the provisions of
this Section in each applicable jurisdiction. 

     

    ARTICLE VII
ADDITIONAL COMPENSATION MATTERS

     

         Section 7.1 Vishay Individual
Arrangements. Vishay
acknowledges and agrees that, except as otherwise provided herein, Vishay (or
another member of the Vishay Group) shall have full responsibility with respect
to any Liabilities and the payment or performance of any obligations arising out
of or relating to any employment, consulting, non-competition, retention or
other compensatory arrangement previously provided by any member of the Vishay
Group to any Vishay Participant, including life insurance policies not held in
any trust and covering any Vishay Participant. The Parties shall transfer or
assign to VPG or another member of VPG Group, and shall use commercially
reasonable efforts to cause their respective employees to consent to the
transfer or assignment of, the rights and Liabilities arising under any
agreements entered into between Vishay or another member of the Vishay Group and
VPG Employees who become VPG Employees prior to the Distribution Date and whose
agreements are not replaced with agreements with members of the VPG
Group.

     

         Section 7.2 Severance Benefits. Vishay and VPG acknowledge and agree that
the Separation and any transfer of employment from the Vishay Group to the VPG
Group by reason thereof will not constitute a termination of employment for
purposes of any policy, plan, program or agreement of Vishay or any member of
the Vishay Group that provides for the payment of severance, separation pay,
salary continuation or similar benefits in the event of a termination of
employment or a change in control. The Parties shall use their reasonable
commercial efforts to cause their respective employees to consent to the
amendment of any agreements entered into between Vishay or any other member of
the Vishay Group and VPG Employees who become VPG Employees prior to the
Distribution Date that are inconsistent with the preceding sentence.


     

         Section 7.3 Not a Change in Control. The Parties hereto acknowledge and agree
that the Separation will not constitute a “change in control” for purposes of
any Vishay Benefit Plan or VPG Benefit Plan.

     

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          Section 7.4 COBRA Coverage  . Except to the extent
provided otherwise on Schedule C: 

     

              (a) VPG and the VPG Welfare Plan will assume responsibility for compliance
with COBRA with respect to any COBRA Beneficiary who is entitled to COBRA
coverage in respect of an individual who is a participant in a VPG Welfare Plan
on or before the Distribution Date. VPG and the VPG Welfare Plan will assume the
responsibility for such COBRA compliance effective as of the date that the VPG
Employee with respect of whom the COBRA Beneficiary is entitled to COBRA
coverage becomes covered by the applicable VPG Welfare Plan. 

     

              (b) VPG and the VPG Welfare Plan will assume responsibility for compliance
with COBRA with respect to any COBRA Beneficiary who is entitled to COBRA
coverage in respect of such COBRA Beneficiary’s employment with a member of the
VPG Group on or before the Distribution Date. VPG and the VPG Welfare Plan will
assume the responsibility for such COBRA compliance effective as of the date
that the VPG Welfare Plan is established. 

     

              (c) Vishay and the Vishay Welfare Plan will retain responsibility for
compliance with COBRA with respect to all other individuals who are receiving or
who are entitled to receive COBRA coverage. 

     

         Section 7.5 Tax Matters. 

     

              (a) Tax Deductions in General. Subject to the provisions of Section 7.5(b),
the Parties agree to take the actions that are necessary or desirable to enable
the Party responsible for any payment under this Agreement to receive, to the
extent possible, the benefit of any tax deduction related to such payment. If
one Party receives a tax benefit as a result of any payment or benefit funded by
the other Party under this Agreement, the first Party shall reimburse the other
Party for that tax benefit at the time and to the extent that such tax benefit
is realized. 

     

              (b) Equity-Based Compensation
Deductions.
Notwithstanding the provisions of Section 7.5(a), the Parties agree that, to the
extent permitted by law, tax deductions for equity-based compensation described
in Section 5.3 shall be allocated to and claimed by the member or members of the
Vishay Group or the VPG Group, as the case may be, that employed the individual
receiving the compensation during the relevant vesting period based on the
number of months of such individual’s employment with such entity or
entities.

     

              (c) The member or members of a Group claiming any tax deduction on account of
compensation paid to a VPG Employee shall be responsible for any tax reporting
obligations, including but not limited to the filing of any required form W-2,
and payment of any taxes imposed upon the employer in respect of the
corresponding amounts, in proportion to the amount claimed as a deduction. The
Party in control of the payment of any such amounts shall be responsible for
effecting the withholding of any applicable income and employment tax
withholding required to be effected from any such payment. The Parties shall
cooperate with each other to facilitate any required tax reporting obligations,
including sharing, as relevant, information regarding amounts withheld from the
payments to the employees. To the extent deductions cannot be claimed in the
manner referenced in this Section 7.5(c), or are disallowed or adjusted on audit, the entity that receives
the tax benefit shall reimburse the entity that would have received such tax
benefit pursuant to the preceding sentence as and when realized. To the extent
such reimbursement is treated as taxable income, the reimbursing party shall
gross-up the reimbursement amount for taxes.

     

    17

     

    

    
    



              (d) Code Section 409A. Notwithstanding anything in this Agreement
to the contrary, the Parties agree to cooperate to minimize the loss of
deductions and to utilize commercially reasonable best efforts to have the
applicable plans, programs and arrangements comply with Section 409A of the
Code.

     

    ARTICLE
VIII
INDEMNIFICATION

     

         Section 8.1 Indemnification by Vishay. Vishay shall indemnify, defend and hold
harmless VPG, each other member of the Vishay Group and each of their respective
current and former directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the
“VPG Indemnified Parties”), from and against any and all Liabilities
of the VPG Indemnified Parties relating to, arising out of or resulting from any
breach of, or failure to perform or comply with, any covenant, undertaking or
obligation of, this Agreement by Vishay or any other member of the Vishay Group.


     

         Section 8.2 Indemnification by VPG. VPG shall indemnify defend and hold harmless
Vishay, each of other member of the Vishay Group and each of their respective
current and former directors, officers and employees, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the
“Vishay Indemnified Parties”) from and against any and all Liabilities of
the Vishay Indemnified Parties relating to, arising out of or resulting from any
breach of, or failure to perform or comply with, any covenant, undertaking or
obligation of, this Agreement by VPG or any other member of the VPG Group.


     

         Section 8.3 Procedures for Indemnification of
Claims. Indemnification of
third party claims shall be governed by the procedures set forth in Section 5.6
of the Separation Agreement. Indemnification for direct claims shall be governed
by the procedures set forth in Section 5.7 of the Separation Agreement. Payment
shall be made in accordance with the provision of Section 5.8 of the Separation
Agreement. For the avoidance of doubt, the provisions of Section 5.5 of the
Separation Agreement shall not be applicable to claims under this Article 8.


     

    ARTICLE IX
GENERAL AND ADMINISTRATIVE

     

         Section 9.1 Sharing of Information. Vishay and VPG, and the members of their
respective Groups, each shall provide to the other Party and its respective
agents and vendors all Information as the other may reasonably request to enable
the requesting Party to administer efficiently and accurately each of its
Benefit Plans and to determine the scope of, as well as fulfill, its obligations
under this Agreement. Such information shall, to the extent reasonably
practicable, be provided in the format and at the times and places requested,
but in no event shall the Party providing such information be obligated to incur
any out-of-pocket expenses not reimbursed by the Party making such request or
make such information available outside of its normal business hours and premises. Any information shared or exchanged
pursuant to this Agreement shall be subject to the confidentiality requirements
set forth in Sections 4.5 and 4.6 of the Separation Agreement. With respect to
personal health information (“PHI”) as defined in the administrative
regulations promulgated pursuant to the Health Insurance Portability and
Accountability Act of 1996, as amended, the Parties agree to comply with such
regulations, including, but not limited to, entering into any business associate
agreements that may be required for the sharing of PHI.

     

    18

     

    

    
    



         Section 9.2 Reasonable
Efforts/Cooperation. Each
of the Parties hereto will use its commercially reasonable efforts to promptly
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under Applicable Law and regulations to
consummate the transactions contemplated by this Agreement, including adopting
plans or plan amendments. Each of the Parties hereto shall provide reasonable
cooperation on any issue relating to the transactions contemplated by this
Agreement for which the other Party seeks a determination letter or private
letter ruling from the United States Internal Revenue Service, an advisory
opinion from the United States Department of Labor or any other filing, consent
or approval with respect to or by a Governmental Entity.

     

         Section 9.3 Employer Rights. Nothing in this Agreement shall prohibit VPG
or any other member of the VPG Group from amending, modifying or terminating any
VPG Benefit Plan at any time after the Distribution Date, within its sole
discretion. In addition, nothing in this Agreement shall prohibit Vishay or any
other member of the Vishay Group from amending, modifying or terminating any
Vishay Benefit Plan at any time, within its sole discretion.

     

         Section 9.4 Effect on Employment. Nothing in this Agreement is intended to
confer upon any employee or former employee of Vishay, VPG or any member of
their respective Group any right to continued employment, or any recall or
similar rights to an individual on layoff or any type of approved
leave.

     

         Section 9.5 Consent of Third Parties. If any provision of this Agreement requires
the consent of any third party, the Parties shall use their commercially
reasonable efforts to obtain such consent. If despite such efforts the consent
cannot be obtained, the Parties shall negotiate in good faith to modify the
applicable provision so as to effect the purposes and intents of this Agreement
to the extent reasonably possible notwithstanding the absence of such
consent.

     

         Section 9.6 Beneficiary Designation/Release of
Information/Right to Reimbursement. To the extent permitted by Applicable Law and except as otherwise
provided for in this Agreement, all beneficiary designations, authorizations for
the release of information and rights to reimbursement made by or relating to
VPG Employees under Vishay Benefit Plans shall be transferred to, and be in full
force and effect under, the corresponding VPG Benefit Plans until such
beneficiary designations, authorizations or rights are replaced or revoked by,
or no longer apply to, the applicable VPG Employee.

     

         Section 9.7 Fiduciary Matter. Vishay and VPG each acknowledge that the
transfer of account balances and assets from the Vishay 401(k) Plan to the VPG
401(k) Plan will be subject to fiduciary duties or standards of conduct under
ERISA or other Applicable Law, and no Party shall be deemed to be in violation
of this Agreement if it fails to comply with any provisions hereof based upon its good faith determination
(as supported by advice from counsel experienced in such matters) that to do so
would violate such a fiduciary duty or standard. Each Party shall be responsible
for taking such actions as are deemed necessary and appropriate to comply with
its own fiduciary responsibilities.

     

    19

     

    

    
    



    ARTICLE X
MISCELLANEOUS

     

         Section 10.1 Termination. Notwithstanding anything in this Agreement
to the contrary, if the Separation Agreement is not executed on or before
December 31, 2010 or if it terminates without the Separation having occurred,
this Agreement shall automatically terminate without the action of any Party,
and neither Party shall have any Liability or further obligation to the other
Party under this Agreement.

     

         Section 10.2 Relationship of Parties. This Agreement shall not be construed to
place the Parties in the relationship of legal representatives, partners, joint
venturers or agents of or with each other. No Party shall have any power to
obligate or bind the other Party in any manner whatsoever, except as
specifically provided herein. 

     

         Section 10.3 Groups. Each of Vishay and VPG shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth in this Agreement to be performed by the members of their
respective Groups.

     

         Section 10.4 Notices. All notices, demands and other
communications required to be given to a Party hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered, sent by a
nationally recognized overnight courier, transmitted by facsimile, or mailed by
registered or certified mail (postage prepaid, return receipt requested) to such
Party at the relevant street address, facsimile number or e-mail address set
forth below (or at such other street address, facsimile number or e-mail address
as such Party may designate from time to time by written notice in accordance
with this provision): 

     

         If to Vishay, to:

     

         Vishay Intertechnology,
Inc.
     63 Lancaster
Avenue
     Malvern, PA
19355-2120
     Attention: Dr. Lior E. Yahalomi, Chief
Financial Officer
     Telephone: 610-644-1300
     Facsimile: 610-889-2161

     

         with a copy to: 

     

         Kramer Levin Naftalis & Frankel
LLP
     1177 Avenue of the
Americas
     New York, NY
10036
     Attention: Abbe L.
Dienstag, Esq.
     Telephone:
212-715-9100
     Facsimile:
212-715-8000

     

    20

     

    

    
    



         If to VPG, to: 

     

         Vishay Precision Group,
Inc.
     3 Great Valley
Parkway
     Malvern, PA
19355-1307
     Attention: William M. Clancy, Chief Financial
Officer
     Telephone:
484-321-5300
     Facsimile:
484-321-5300 

     

         with a copy to: 

     

         Pepper Hamilton LLP
     3000 Two Logan Square
     Eighteenth and Arch
Streets
     Philadelphia, Pennsylvania 19103-2799
     Attention: Barry Abelson,
Esq.
     Telephone:
215-981-4000
     Facsimile:
215-981-4750 

     

    Any notice, demand or
other communication hereunder shall be deemed given upon the first to occur of:
(i) the fifth (5th) day after deposit thereof, postage prepaid
and addressed correctly, in a receptacle under the control of the United States
Postal Service; (ii) transmittal by facsimile transmission to a receiver or
other device under the control of the Party to whom notice is being given; or
(iii) actual delivery to or receipt by the Party to whom notice is being given
or an employee or agent thereof.

     

         Section 10.5 Entire Agreement. This Agreement and the Exhibits hereto, as
well as any other agreements and documents referred to herein, constitute the
entire agreement between the Parties with respect to the subject matter hereof
and thereof and supersede all previous agreements, negotiations, discussions,
understandings, writings, commitments and conversations between the Parties with
respect to such subject matter. No agreements or understandings exist between
the Parties other than those set forth or referred to herein or therein.


     

         Section 10.6 Waiver of Default. 

     

              (a) Any term or provision of this Agreement may be waived, or the time for
its performance may be extended, by the Party or the Parties entitled to the
benefit thereof. Any such waiver shall be validly and sufficiently given for the
purposes of this Agreement if, as to any Party, it is in writing signed by an
authorized representative of such Party. 

     

              (b) Waiver by any Party of any default by the other Party of any provision of
this Agreement shall not be construed to be a waiver by the waiving Party of any
subsequent or other default, nor shall it in any way affect the validity of this
Agreement or any Party hereof or prejudice the rights of the other Party
thereafter to enforce each and ever such provision. No failure or delay by any
Party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. 

     

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         Section 10.7 Amendments. No provisions of this Agreement shall be
deemed amended, modified or supplemented by any Party, unless such amendment,
supplement or modification is in writing and signed by the authorized
representative of the Party against whom it is sought to enforce such amendment,
supplement or modification. 

     

         Section 10.8 Governing Law. This Agreement and the legal relations
between the Parties shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflict of laws rules
thereof to the extent such rules would require the application of the law of
another jurisdiction.

     

         Section 10.9 Dispute Resolution. The procedures set forth in Article VIII of
the Separation Agreement shall apply to this resolution of all disputes arising
under this Agreement, provided, however, that the dispute resolution procedures set
forth in any Benefit Plan shall govern with respect to claims arising under such
Benefit Plan.

     

         Section 10.10 Construction. Any uncertainty or ambiguity with respect to
any provision of this Agreement shall not be construed for or against any Party
based on attribution of drafting by either Party. The headings contained herein
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. In this Agreement, unless a clear contrary
intention appears: 

     

              (a) the singular number includes the plural number and vice versa;


     

              (b) reference to any Person includes such Person’s successors and assigns
but, if applicable, only if such successors and assigns are not prohibited by
this Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually; 

     

              (c) reference to any gender includes each other gender; 

     

              (d) reference to any agreement, document or instrument means such agreement,
document or instrument as amended, modified, supplemented or restated, and in
effect from time to time in accordance with the terms thereof subject to
compliance with the requirements set forth herein; 

     

              (e) reference to any Applicable Law means such Applicable Law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder, and
reference to any section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such section or other provision; 

     

              (f) “herein,” “hereby,” “hereunder,” “hereof,” “hereto” and words of similar
import shall be deemed references to this Agreement as a whole and not to any
particular article, section or other provision hereof or thereof; 

     

              (g) “including” (and with correlative meaning “include”) means including
without limiting the generality of any description preceding such term;


     

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              (h) the headings are for convenience of reference only and shall not affect
the construction or interpretation hereof or thereof; 

     

              (i) with respect to the determination of any period of time, “from” means
“from and including” and “to” means “to but excluding;” and 

     

              (j) references to documents, instruments or agreements shall be deemed to
refer as well to all addenda, exhibits, schedules or amendments thereto.


     

         Section 10.11 Counterparts. This Agreement may be executed in more than
one counterpart, each of which shall be deemed an original instrument and all of
which together shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
Parties and delivered to the other Parties. A facsimile or electronic signature
is deemed an original signature for all purposes under this Agreement.


     

         Section 10.12 Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties, and their respective successors and
permitted assigns; provided, however, that no Party may assign, delegate or
transfer (by merger, operation of law or otherwise) its respective rights or
delegate its respective obligations under this Agreement without the express
prior written consent of the other Party. Notwithstanding the foregoing, either
Party may assign its rights and obligations under this Agreement to any
Wholly-owned Subsidiary; provided, however, that each Party shall at all times remain
liable for the performance of its obligations under this Agreement by any such
Wholly-owned Subsidiary. Any attempted assignment or delegation in violation of
this Section 10.12 shall be void. 

     

         Section 10.13 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances or in jurisdictions other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect and shall in no
way be affected, impaired or invalidated thereby, so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any Party. Upon such determination, the Parties shall
negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the Parties. 

     

         Section 10.14 Specific Performance. The Parties agree that the remedy at law for
any breach of this Agreement may be inadequate, and that, as between Vishay and
VPG, any Party by whom this Agreement is enforceable shall be entitled to
specific performance in addition to any other appropriate relief or remedy. Such
Party may, in its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement as between Vishay and
VPG, or prevent any violation hereof, and, to the extent permitted by Applicable
Law, as between Vishay and VPG, each Party waives any objection to the
imposition of such relief. 

     

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         Section 10.15 Waiver of Jury Trial. Subject to Section 10.9 and Section 10.14,
each of the Parties hereby waives to the fullest extent permitted by Applicable
Law any right it may have to a
trial by jury with respect to any court proceeding directly or indirectly
arising out of and permitted under or in connection with this agreement or the
transactions contemplated by this agreement. Each of the Parties hereby (a)
certifies that no representative, agent or attorney of any other Party has
represented, expressly or otherwise, that such other Party would not, in the
event of litigation, seek to enforce the foregoing waiver and (b) acknowledges
that it has been induced to enter into this agreement and the transactions
contemplated by this agreement, as applicable, by, among other things, the
mutual waivers and certifications in this Section 10.15. 

     

         Section 10.16 Consent to Jurisdiction. Subject to the provisions of Section 10.9,
each of the Parties irrevocably submits to the jurisdiction of the federal and
state courts located in Philadelphia, Pennsylvania and the City of New York,
Borough of Manhattan for the purposes of any suit, Action or other proceeding to
compel arbitration, for the enforcement of any arbitration award or for specific
performance or other equitable relief pursuant to Section 10.14. Each of the
Parties further agrees that service of process, summons or other document by
U.S. registered mail to such Parties address as provided in Section 10.4 shall
be effective service of process for any Action, suit or other proceeding with
respect to any matters for which it has submitted to jurisdiction pursuant to
this Section 10.16. Each of the Parties irrevocably waives any objection to
venue in the federal and state courts located in Philadelphia, Pennsylvania and
the City of New York, Borough of Manhattan of any Action, suit or proceeding
arising out of this Agreement, or the transactions contemplated hereby for which
it has submitted to jurisdiction pursuant to this Section 10.16, and waives any
claim that any such Action, suit or proceeding brought in any such court has
been brought in an inconvenient forum. 

     

         Section 10.17 Nonrecurring Costs and
Expenses. Notwithstanding
anything herein to the contrary, any nonrecurring costs and expenses incurred by
the Parties to effect the transactions contemplated hereby which are not
allocated pursuant to the terms of this Agreement shall be the responsibility of
the Party which incurs such costs and expenses. 

     

         Section 10.18 Press Releases; Public
Announcements. Neither
Party shall issue any release or make any other public announcement concerning
this Agreement or the transactions contemplated hereby without the prior written
approval of the other Party, which approval shall not be unreasonably withheld,
delayed or conditioned; provided, however, that either Party shall be permitted to make
any release or public announcement that in the opinion of its counsel it is
required to make by law or the rules of any national securities exchange of
which its securities are listed; provided further that it has made efforts that are reasonable
in the circumstances to obtain the prior approval of the other Party.


     

         Section 10.19 No Third-Party
Beneficiaries. Except for
the indemnification rights under this Agreement of any Vishay Indemnified Party
or any VPG Indemnified Party in their respective capacities as such: (i) the
provisions of this Agreement are solely for the benefit of the Parties and their
respective successors and permitted assigns, and are not intended to confer upon
any Person, except the Parties and their respective successors and permitted
assigns, any rights or remedies hereunder; (ii) there are no third party
beneficiaries of this Agreement; and (iii) this Agreement shall not provide any
third party with any remedy, claim, liability, reimbursement, claim of action or
other right in excess of those existing without reference to this Agreement.


     

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    [SIGNATURE PAGE
FOLLOWS]

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

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         WHEREFORE, the
Parties have signed this Agreement effective as of the date first set forth
above.

     

     

     

    
      	VISHAY INTERTECHNOLOGY, INC.
	 
	 
	By:   	 
	
            	Name:
	
            	Title:
	 
	 
	 
	 
	VISHAY PRECISION GROUP, INC.
	 
	 
	By:	 
	
            	Name:
	
            	Title:


    


    

    
    



    SCHEDULE A

     

     Existing VPG Benefit Plans 

     

     Measurements Group, Inc. Tax Deferred Savings Plan 

     

    

    
    



    SCHEDULE B

     

     A. Israel 

     

          Section A.1 Israel. The following provisions apply to employees
resident in Israel or that otherwise are subject to Israeli law (an “Israeli
Employee”) 

     

               (a) Transfer of
Employees  . Prior to the Distribution Date, to the extent not previously
transferred, all Vishay Employees that are Israeli Employees that are or as of
the Distribution Date are expected to be, primarily employed in the MGF
Business, as well as any other Vishay Employees that are Israeli Employees that
Vishay and VPG determine should become VPG Employees, including such employees
who are on leave, shall be transferred to the VPG Group. Each such employee is
referred to as an “Israeli Transferring Employee.” 

     

               (b) Consent to Transfer. Vishay or the applicable member of the
Vishay Group shall obtain from each Israeli Transferring Employee a written
consent to such transfer of employment. 

     

               (c) Transfer of
Liabilities  . Each member of the VPG Group which employs an Israeli
Transferring Employee will assume all liabilities related to such Israeli
Transferring Employee, including all applicable Benefit Plans or applicable
accounts under such Benefit Plans, accrued sick and vacation days and will
credit each Israeli Transferring Employee with years of service with the Vishay
Group. Each member of the Vishay Group that is an employer of one or more
Israeli Transferring Employees shall enter into an agreement with the
corresponding member of the VPG Group to which such Israeli Transferring
Employee transferred employment, under which the member of the VPG Group agrees
to assume all liabilities relating to the Israeli Transferring Employee.


     

     B. Europe  

     

          Section B.1   The following provisions
apply to employees resident in the United Kingdom, France, Spain, Germany or
Austria or that otherwise are subject to applicable law of such countries (a
“European Employee”) 

     

               (a) Transfer of
Employees  . Prior to the Distribution Date, to the extent not previously
transferred, all Vishay Employees that are European Employees that are or as of
the Distribution Date are expected to be, primarily employed in the MGF
Business, as well as any other Vishay Employees that are European Employees that
Vishay and VPG determine should become VPG Employees shall be transferred to the
VPG Group. Each such employee is referred to as a “European Transferring
Employee.” 

     

               (b) Benefits  . All European
Transferring Employees will receive the same benefits from the applicable member
of the VPG Group as such individual received from the applicable member of the
Vishay Group prior to his or her Transfer Date. 

     

    

    
    



     C. Asia 

     

          Section C.1   The following provisions
apply to employees resident in the Japan, Taiwan, China or Singapore that
otherwise are subject to applicable law of such countries (an “Asian
Employee”) 

     

               (a) Transfer of
Employees  . Prior to the Distribution Date, to the extent not previously
transferred, all Vishay Employees that are Asian Employees that are or as of the
Distribution Date are expected to be, primarily employed in the MGF Business, as
well as any other Vishay Employees that are Asian Employees that Vishay and VPG
determine should become VPG Employees shall be transferred to the VPG Group.
Each such employee is referred to as a “Asian Transferring Employee.”


     

               (b) Leased Employees  . Prior to the
Distribution Date, to the extent not previously transferred, all Individuals are
employed by an employment agency and provide services to a member of the Vishay
Group and who (i) would be Asian Employees were they directly employed by the
entity to which they provide services and (ii) are or as of the Distribution
Date are expected to be, primarily providing services to the MGF Business, or
(iii) whom Vishay and VPG determine should provide services to the VPG Group,
shall be referred to as “Asian Leased Employees.” Each Asian Leased Employee,
the applicable member of the Vishay Group, the applicable member of the VPG
Group and VPG shall enter into an agreement under which the Asian Leased
Employee will continue to be employed by the employment agency, shall provide
services to the VPG Group. 

     

               (c) General  . Except as set forth
above, all Asian Employees are employed by an entity that will be a member of
the VPG Group. 

     

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