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Dragon Acquisition Corporation: Exhibit 10.11 - Filed by newsfilecorp.com

Exhibit 10.11 

INDEMNIFICATION AGREEMENT 

This Indemnification Agreement
(this “Agreement”) is entered into as of June 22, 2010, by and between
Dragon Acquisition Corporation, a Cayman Islands company (the “Company”)
and the undersigned, a director and/or an officer of the Company
(“Indemnitee”), as applicable.

RECITALS 

The Board of Directors of the
Company (the “Board of Directors”) has determined that the inability to
attract and retain highly competent persons to serve the Company is detrimental
to the best interests of the Company and its shareholders and that it is
reasonable and necessary for the Company to provide adequate protection to such
persons against risks of claims and actions against them arising out of their
services to the corporation.

AGREEMENT 

In consideration of the premises
and the covenants contained herein, the Company and Indemnitee do hereby
covenant and agree as follows:

	A. 	
      DEFINITIONS

The following terms shall have the meanings defined below:

Expenses shall
include, without limitation, damages, judgments, fines, penalties, settlements
and costs, attorneys’ fees and disbursements and costs of attachment or similar
bond, investigations, and any other expenses paid or incurred in connection with
investigating, defending, being a witness in, participating in (including on
appeal), or preparing for any of the foregoing in, any Proceeding.

Indemnifiable Event
means any event or occurrence that takes place either before or after the
execution of this Agreement, related to the fact that Indemnitee is or was a
director or an officer of the Company, or is or was serving at the request of
the Company as a director or officer of another corporation, partnership, joint
venture or other entity, or related to anything done or not done by Indemnitee
in any such capacity, including, but not limited to neglect, breach of duty,
error, misstatement, misleading statement or omission.

Participant means a
person who is a party to, or witness or participant (including on appeal) in, a
Proceeding.

Proceeding means
any threatened, pending, or completed action, suit, arbitration or proceeding,
or any inquiry, hearing or investigation, whether civil, criminal,
administrative, investigative or other, including appeal, in which Indemnitee
may be or may have been involved as a party or otherwise by reason of an
Indemnifiable Event.

	B. 	
      AGREEMENT TO INDEMNIFY

1. General Agreement. In
the event Indemnitee was, is, or becomes a Participant in, or is threatened to
be made a Participant in, a Proceeding, the Company shall indemnify the
Indemnitee from and against any and all Expenses which Indemnitee incurs or
becomes obligated to incur in connection with such Proceeding, whether or not
such Proceeding proceeds to judgment or is settled or is otherwise brought to a
final disposition, to the fullest extent permitted by applicable law.

2. Indemnification of Expenses
of Successful Party. Notwithstanding any other provision of this Agreement,
to the extent that Indemnitee has been successful on the merits in defense of
any Proceeding or in defense of any claim, issue or matter in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses incurred in
connection with such Proceeding or such claim, issue or matter, whether or not
such Proceeding proceeds to judgment or is settled or is otherwise brought to a
final disposition, as the case may be, offset by the amount of cash, if any,
received by the Indemnitee resulting from his/her success therein.

3. Partial
Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for a portion of Expenses, but not
for the total amount of Expenses, the Company shall indemnify the Indemnitee for
the portion of such Expenses to which Indemnitee is entitled.

4. Exclusions.
Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not
be entitled to indemnification under this Agreement:

(a) to the extent that payment is
actually made to Indemnitee under a valid, enforceable and collectible insurance
policy;

(b) to the extent that Indemnitee
is indemnified and actually paid other than pursuant to this Agreement;

(c) subject to Section C.2(a), in
connection with a judicial action by or in the right of the Company, in respect
of any claim, issue or matter as to which the Indemnitee shall have been
adjudicated by a court of competent jurisdiction, in a decision from which there
is no further right of appeal, to be liable for gross negligence or knowing or
willful misconduct in the performance of his/her duty to the Company unless and
only to the extent that any court in which such action was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses as such court shall deem
proper;

(d) in connection with any
Proceeding initiated by Indemnitee against the Company, any director or officer
of the Company or any other party, and not by way of defense, unless (i) the
Company has joined in or the Board of Directors has consented to the initiation
of such Proceeding; or (ii) the Proceeding is one to enforce indemnification
rights under this Agreement or any applicable law;

(e) brought about by the
dishonesty or fraud of the Indemnitee seeking payment hereunder; provided,
however, that the Company shall indemnify Indemnitee under this Agreement as to
any claims upon which suit may be brought against him by reason of any alleged
dishonesty on his/her part, unless a judgment or other final adjudication
thereof adverse to the Indemnitee establishes that he/she committed (i) acts of
active and deliberate dishonesty, (ii) with actual dishonest purpose and intent,
and (iii) which acts were material to the cause of action so adjudicated;

(f) for any judgment, fine or
penalty which the Company is prohibited by applicable law from paying as
indemnity;

(g) arising out of Indemnitee’s
breach of an employment agreement with the Company (if any) or any other
agreement with the Company or any of its subsidiaries, or

(h) arising out of Indemnitee’s
personal income tax payable on any salaries, bonuses, director’s fees, including
fees for attending meetings, or gain on disposition of shares, options or
restricted shares of the Company.

5. No Employment Rights.
Nothing in this Agreement is intended to create in Indemnitee any right to
continued employment with the Company.

6. Contribution. If the
indemnification provided in this Agreement is unavailable and may not be paid to
Indemnitee for any reason other than those set forth in Section B.4, then the
Company shall contribute to the amount of Expenses paid in settlement actually
and reasonably incurred and paid or payable by Indemnitee in such proportion as
is appropriate to reflect (i) the relative benefits received by the Company on
the one hand and by the Indemnitee on the other hand from the transaction or
events from which such Proceeding arose, and (ii) the relative fault of the
Company on the one hand and of the Indemnitee on the other hand in connection
with the events which resulted in such Expenses, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of the Indemnitee on the other hand shall be determined by reference to, among
other things, the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent the circumstances resulting in such Expenses,
judgments, fines or settlement amounts. The Company agrees that it would not be
just and equitable if contribution pursuant to this Section B.6 were determined
by pro rata allocation or any other method of allocation which does not take
account of the foregoing equitable considerations.

	C. 	
      INDEMNIFICATION PROCESS

1. Notice and Cooperation By
Indemnitee. Indemnitee shall, as a condition precedent to his/her right to
be indemnified under this Agreement, give the Company notice in writing as soon
as practicable of any claim made against Indemnitee for which indemnification
will or could be sought under this Agreement, provided that the delay of
Indemnitee to give notice hereunder shall not prejudice any of Indemnitee’s
rights hereunder, unless such delay results in the Company’s forfeiture of
substantive rights or defenses. Notice to the Company shall be given in
accordance with Section F.7 below. If, at the time of receipt of such notice,
the Company has directors’ and officers’ liability insurance policies in
effect, the Company shall give prompt notice to its insurers of the Proceeding
relating to the notice. The Company shall thereafter take all necessary and
desirable action to cause such insurers to pay, on behalf of Indemnitee, all
Expenses payable as a result of such Proceeding. In addition, Indemnitee shall
give the Company such cooperation as the Company may reasonably request and the
Company shall give the Indemnitee such cooperation as the Indemnitee may
reasonably request, including providing any documentation or information which
is not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee or the Company, as the case may be.

2. Indemnification Payment.

(a) Advancement of
Expenses. Indemnitee may submit a written request with reasonable
particulars to the Company requesting that the Company advance to Indemnitee all
Expenses that may be reasonably incurred in advance by Indemnitee in connection
with a Proceeding. The Company shall, within ten (10) business days of receiving
such a written request by Indemnitee, advance all requested Expenses to
Indemnitee. Any excess of the advanced Expenses over the actual Expenses will be
repaid to the Company.

(b) Reimbursement of
Expenses. To the extent Indemnitee has not requested any advanced payment of
Expenses from the Company, Indemnitee shall be entitled to receive reimbursement
for the Expenses incurred in connection with a Proceeding from the Company as
soon as practicable and, in any event, within 30 days after Indemnitee makes a
written request to the Company for reimbursement unless the Company refers the
indemnification request to the Reviewing Party in compliance with Section C.2(c)
below.

(c) Determination by the
Reviewing Party. If the Company reasonably believes that it is not obligated
under this Agreement to indemnify the Indemnitee, the Company shall, within 10
days after the Indemnitee’s written request for an advancement or reimbursement
of Expenses, notify the Indemnitee that the request for advancement of Expenses
or reimbursement of Expenses will be submitted to the Reviewing Party (as
hereinafter defined). The Reviewing Party shall make a determination on the
request within 30 days after the Indemnitee’s written request for an advancement
or reimbursement of Expenses. Notwithstanding anything foregoing to the
contrary, in the event the Reviewing Party informs the Company that Indemnitee
is not entitled to indemnification in connection with a Proceeding under this
Agreement or applicable law, the Company shall be entitled to be reimbursed by
Indemnitee for all the Expenses previously advanced or otherwise paid to
Indemnitee in connection with such Proceeding; provided, however,
that Indemnitee may bring a suit to enforce his/her indemnification right in
accordance with Section C.3 below.

3. Suit to Enforce Rights.
Regardless of any action by the Reviewing Party, if Indemnitee has not received
full indemnification within 30 days after making a written demand in accordance
with Section C.2 above or 50 days if the Company submits a request for
advancement or reimbursement to the Reviewing Party under Section C.2(c),
Indemnitee shall have the right to enforce its indemnification rights under this
Agreement by commencing litigation in any court of competent jurisdiction
seeking a determination by the court or challenging any determination by the
Reviewing Party or with respect to any breach in any aspect of this Agreement. Any determination by the Reviewing
Party not challenged by Indemnitee and any judgment entered by the court shall
be binding on the Company and Indemnitee.

4. Assumption of Defense.
In the event the Company is obligated under this Agreement to advance or bear
any Expenses for any Proceeding against Indemnitee, the Company shall be
entitled to assume the defense of such Proceeding, with counsel approved by
Indemnitee, upon delivery to Indemnitee of written notice of its election to do
so. After delivery of such notice, approval of such counsel by Indemnitee and
the retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same Proceeding, unless (i) the employment of
counsel by Indemnitee has been previously authorized by the Company, (ii)
Indemnitee shall have reasonably concluded, based on written advice of counsel,
that there may be a conflict of interest of such counsel retained by the Company
between the Company and Indemnitee in the conduct of any such defense, or (iii)
the Company ceases or terminates the employment of such counsel with respect to
the defense of such Proceeding, in any of which events the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company. At all times,
Indemnitee shall have the right to employ counsel in any Proceeding at
Indemnitee’s expense.

5. Burden of Proof and
Presumptions. Upon making a request for indemnification, Indemnitee shall be
presumed to be entitled to indemnification under this Agreement and the Company
shall have the burden of proof to overcome that presumption in reaching any
contrary determination.

6. No Settlement Without
Consent. Neither party to this Agreement shall settle any Proceeding in any
manner that would impose any damage, loss, penalty or limitation on Indemnitee
without the other party’s written consent. Neither the Company nor Indemnitee
shall unreasonably withhold its consent to any proposed settlement.

7. Company Participation.
Subject to Section B.6, the Company shall not be liable to indemnify the
Indemnitee under this Agreement with regard to any judicial action if the
Company was not given a reasonable and timely opportunity, at its expense, to
participate in the defense, conduct and/or settlement of such action.

8. Reviewing Party.

(a) For purposes of this
Agreement, the Reviewing Party with respect to each indemnification request of Indemnitee that is referred by the Company pursuant to Section C.2(c) above
shall be shall be (A) the Board of Directors by a majority vote of a quorum
consisting of Disinterested Directors (as hereinafter defined), or (B) if a
quorum of the Board of Directors consisting of Disinterested Directors is not
obtainable or, even if obtainable, said Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to Indemnitee. If the Reviewing Party determines that
Indemnitee is entitled to indemnification, payment to Indemnitee shall be made
within ten (10) days after such determination. Indemnitee shall cooperate with
the person, persons or entity making such determination with respect to Indemnitee’s
entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
Independent Counsel or member of the Board of Directors shall act reasonably and
in good faith in making a determination under this Agreement of the Indemnitee’s
entitlement to indemnification. Any reasonable costs or expenses (including
reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so
cooperating with the person, persons or entity making such determination shall
be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company hereby indemnifies and agrees to
hold Indemnitee harmless therefrom. “Disinterested Director” means a
director of the Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee.

(b) If the determination of
entitlement to indemnification is to be made by Independent Counsel, the
Independent Counsel shall be selected as provided in this Section C.8(b). The
Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall
request that such selection be made by the Board of Directors, in which event
the proceeding sentence shall apply), and Indemnitee shall give written notice
to the Company advising it of the identity of the Independent Counsel so
selected. In either event, Indemnitee or the Company, as the case may be, may,
within 10 days after such written notice of selection shall have been given,
deliver to the Company or to Indemnitee, as the case may be, a written objection
to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in Section
C.8(d) of this Agreement, and the objection shall set forth with particularity
the factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If a written objection is
made and substantiated, the Independent Counsel selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit. If, within 20 days after
submission by Indemnitee of a written request for indemnification, no
Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the a court of competent jurisdiction for
resolution of any objection which shall have been made by the Company or
Indemnitee to the other’s selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the court or by such
other person as the court shall designate, and the person with respect to whom
all objections are so resolved or the person so appointed shall act as
Independent Counsel. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting under this Agreement, and the Company shall pay all
reasonable fees and expenses incident to the procedures of this Section C.8(b),
regardless of the manner in which such Independent Counsel was selected or
appointed.

(c) In making a determination
with respect to entitlement to indemnification hereunder, the Reviewing Party
shall presume that Indemnitee is entitled to indemnification under this
Agreement if Indemnitee has submitted a request for indemnification in
accordance with this Agreement, and the Company shall have the burden of proof
to overcome that presumption in connection with the making by any person,
persons or entity of any determination contrary to that presumption. The termination of any Proceeding or of any
claim, issue or matter therein, by judgment, order, settlement (with or without
court approval), conviction, or upon a plea of nolo contendere or its
equivalent, shall not (except as otherwise expressly provided in this Agreement)
of itself adversely affect the right of Indemnitee to indemnification or create
a presumption that Indemnitee did not act in good faith and in a manner which
he/she reasonably believed to be in or not opposed to the best interests of the
Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his/her conduct was unlawful. For purposes of
any determination of good faith, Indemnitee shall be deemed to have acted in
good faith if Indemnitee’s action is based on the records or books of account of
the Company and any other corporation, partnership, joint venture or other
entity of which Indemnitee is or was serving at the written request of the
Company as a director, officer, employee, agent or fiduciary, including
financial statements, or on information supplied to Indemnitee by the officers
and directors of the Company or such other corporation, partnership, joint
venture or other entity in the course of their duties, or on the advice of legal
counsel for the Company or such other corporation, partnership, joint venture or
other entity or on information or records given or reports made to the Company
or such other corporation, partnership, joint venture or other entity by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Company or such other corporation,
partnership, joint venture or other entity. In addition, the knowledge and/or
actions, or failure to act, of any director, officer, agent or employee of the
Company or such other corporation, partnership, joint venture or other entity
shall not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement. The provisions of this Section C.8(c)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.

(d) “Independent Counsel”
means a law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five (5) years has
been, retained to represent (i) the Company or Indemnitee in any matter material
to either such party (other than with respect to matters concerning the
Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the foregoing,
the term “Independent Counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement. The Company agrees
to pay the reasonable fees of the Independent Counsel referred to above and to
fully indemnify such counsel against any and all Expenses, claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.

	D. 	
      DIRECTOR AND OFFICER LIABILITY
  INSURANCE

1. Good Faith
Determination. The Company shall from time to time make the good faith
determination whether or not it is practicable for the Company to obtain and
maintain a policy or policies of insurance with reputable insurance companies
providing the officers and directors of the Company with coverage for losses
incurred in connection with their services to the Company or to ensure the
Company’s performance of its indemnification obligations under this
Agreement.

2. Coverage of Indemnitee.
To the extent the Company maintains an insurance policy or policies providing
directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum
extent of the coverage available for any of the Company’s directors or
officers.

3. No Obligation.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain any director and officer insurance policy if the Company determines in
good faith that such insurance is not reasonably available in the case that (i)
premium costs for such insurance are disproportionate to the amount of coverage
provided, or (ii) the coverage provided by such insurance is limited by
exclusions so as to provide an insufficient benefit.

	E. 	
      NON-EXCLUSIVITY; FEDERAL PREEMPTION;
  TERM

1. Non-Exclusivity. The
indemnification provided by this Agreement shall not be deemed exclusive of any
rights to which Indemnitee may be entitled under the Company’s memorandum and
articles of association, as may be amended from time to time, applicable law or
any written agreement between Indemnitee and the Company (including its
subsidiaries and affiliates). The indemnification provided under this Agreement
shall continue to be available to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though he/she may have ceased to
serve in any such capacity at the time of any Proceeding. To the extent that a
change in the laws of the Cayman Islands permits greater indemnification by
agreement than would be afforded under the Articles of Association or this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits so afforded by such change.

2. Federal Preemption.
Notwithstanding the foregoing, both the Company and Indemnitee acknowledge that
in certain instances, U.S. federal law or public policy may override applicable
law and prohibit the Company from indemnifying its directors and officers under
this Agreement or otherwise. Such instances include, but are not limited to, the
U.S. Securities and Exchange Commission’s prohibition on indemnification for
liabilities arising under certain U.S. federal securities laws. Indemnitee
understands and acknowledges that the Company has undertaken or may be required
in the future to undertake with the SEC to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company’s right under public policy to indemnify Indemnitee.

3. Duration of Agreement.
All agreements and obligations of the Company contained herein shall continue
during the period Indemnitee is an officer and/or a director of the Company (or
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise) and shall continue thereafter so long as Indemnitee shall be subject
to any Proceeding by reason of his/her former or current capacity at the Company
or any other enterprise at the Company’s request, whether or not he/she is
acting or serving in any such capacity at the time any Expense is incurred for
which indemnification can be provided under this Agreement. This Agreement shall
continue in effect regardless of whether Indemnitee continues to serve as an
officer and/or a director of the Company or any other enterprise at the
Company’s request.

	F. 	
      MISCELLANEOUS

1. Amendment of this
Agreement. No supplement, modification, or amendment of this Agreement shall
be binding unless executed in writing by the parties hereto. No waiver of any of
the provisions of this Agreement shall operate as a waiver of any other
provisions (whether or not similar), nor shall such waiver constitute a
continuing waiver. Except as specifically provided in this Agreement, no failure
to exercise or any delay in exercising any right or remedy shall constitute a
waiver.

2. Subrogation. In the
event of payment to Indemnitee by the Company under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company to bring suit to enforce such
rights.

3. Assignment; Binding
Effect. Neither this Agreement nor any of the rights or obligations
hereunder may be assigned by either party hereto without the prior written
consent of the other party; except that the Company may, without such consent,
assign all such rights and obligations to a successor in interest to the Company
which assumes all obligations of the Company under this Agreement.
Notwithstanding the foregoing, this Agreement shall be binding upon and inure to
the benefit of and be enforceable by and against the parties hereto and the
Company’s successors (including any direct or indirect successor by purchase,
merger, consolidation, or otherwise to all or substantially all of the business
and/or assets of the Company) and assigns, as well as Indemnitee’s spouses,
heirs, and personal and legal representatives.

4. Severability and
Construction. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of
applicable law. The Company’s inability, pursuant to a court order, to perform
its obligations under this Agreement shall not constitute a breach of this
Agreement. In addition, if any portion of this Agreement shall be held by a
court of competent jurisdiction to be invalid, void, or otherwise unenforceable,
the remaining provisions shall remain enforceable to the fullest extent
permitted by applicable law. The parties hereto acknowledge that they each have
opportunities to have their respective counsels review this Agreement.
Accordingly, this Agreement shall be deemed to be the product of both of the
parties hereto, and no ambiguity shall be construed in favor of or against
either of the parties hereto.

5. Counterparts. This
Agreement may be executed in two counterparts, both of which taken together
shall constitute one instrument.

6. Governing Law. This
agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the State of New York, U.S.A., without giving
effect to conflicts of law provisions thereof.

7. Notices. All notices,
demands, and other communications required or permitted under this Agreement
shall be made in writing and shall be deemed to have been duly given if
delivered by hand, against receipt, or mailed via postage prepaid, certified or
registered mail, return receipt requested, and addressed to the Company at:

Dragon Acquisition Corporation

Floor 28, Block C
Longhai Mingzhu Building 
No.182 Haier Road

People’s Republic of China 
Attention: Chief Financial Officer

and to Indemnitee at his/her address
last known to the Company.

8. Entire Agreement. This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof.

(Signature page follows) 

IN WITNESS WHEREOF, the parties hereto execute this Agreement
as of the date first written above.

COMPANY: 

DRAGON ACQUISITION CORPORATION 

By:/s/ Weiqing
Zhang                       
 
Name: Weiqing Zhang 
Title: Chief Executive Officer 

INDEMNITEE: 

/s/ Zhaohui John
Liang                        
Name:
Zhaohui John Liang 

Signature Page of Indemnification Agreementexhibit10-2.htm

    Exhibit 10.2 

     

     

     

     

     

    EMPLOYEE MATTERS
AGREEMENT

     

    by and between

     

    VISHAY INTERTECHNOLOGY,
INC.

     

    and

     

    VISHAY PRECISION GROUP,
INC.

     

    Dated June 22,
2010

     

     

     

     

     

    

    
    

    EMPLOYEE MATTERS
AGREEMENT

     

         This EMPLOYEE MATTERS
AGREEMENT (the
“Agreement”) is entered into June 22, 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 June 22, 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. 

     

         “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.

     

    1

     

    

    
    

         “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. 

     

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

     

    2

     

    

    
    

         “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.

     

         “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. 

     

    3

     

    

    
    

         “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. 

     

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

     

    4

     

    

    
    

         “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.

     

         “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.

     

    5

     

    

    
    

         “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.

     

    6

     

    

    
    

              (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. 

     

    7

     

    

    
    

         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.

     

              (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. 

     

    8

     

    

    
    

              (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. 

     

              (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. 

     

    9

     

    

    
    

              (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. 

     

    10

     

    

    
    

    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. 

     

    11

     

    

    
    

              (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. 

     

              (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. 

     

    12 

     

    

    
    

              (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      
	     
  
	        	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;

    

     

    13 

     

    

    
    

    
      	        	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;
	  	 	
            	 	  	  
	  	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;

    

     

    14 

     

    

    
    

    
      	        	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. 

     

    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.

     

    15 

     

    

    
    

    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.

     

         Section 7.4 COBRA Coverage.

     

              (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.

     

    16 

     

    

    
    

              (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.

     

              (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.

     

    17 

     

    

    
    

    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.

     

    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.

     

    19 

     

    

    
    

         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
	
            	 
	
            	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

    

    
    

     

    20 

     

    

    
    

    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. 

     

         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.

     

    21 

     

    

    
    

         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;

     

              (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.

     

    22 

     

    

    
    

         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. 

     

         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. 

     

    23 

     

    

    
    

         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.

     

    [SIGNATURE PAGE
FOLLOWS] 

     

    24 

     

    

    
    

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

     

    
      	
            	VISHAY INTERTECHNOLOGY,
INC.
	
            	
            	 
	 	By:   	/s/ Lior E.
      Yahalomi
	
            	  	Name:       	Dr. Lior E. Yahalomi
	
            	  	Title:	Executive Vice President and Chief
	
            	  	  	Financial Officer
	
            	  
	
            	 
	
            	VISHAY PRECISION GROUP,
INC.
	
            	
            	 
	
            	By:	/s/ William M.
      Clancy
	
            	  	Name:	William M. Clancy
	
            	  	Title:	Executive Vice President and Chief
	
            	  	  	Financial Officer

    

    

    
    

    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.

     

    2

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