Document:

EX-4.2

Exhibit 4.2

Dividend

Reinvestment

Plan

 

 

Table of Contents

	 	 	 	 	 
	Summary
	 	 	1	 
	 
	 	 	 	 
	Questions and Answers
	 	 	2	 
	 
	 	 	 	 
	Dividend Reinvestment Plan
	 	 	5	 
	 
	 	 	 	 
	1.    The Plan
	 	 	5	 
	 
	 	 	 	 
	2.    Eligibility
	 	 	5	 
	 
	 	 	 	 
	3.    How the Plan Works
	 	 	5	 
	 
	 	 	 	 
	4.    How to Enroll
	 	 	6	 
	 
	 	 	 	 
	5.    Certain Limitations
	 	 	7	 
	 
	 	 	 	 
	6.    Statements of Account
	 	 	8	 
	 
	 	 	 	 
	7.    Certificates for Shares
	 	 	8	 
	 
	 	 	 	 
	8.    Termination of Participation
	 	 	8	 
	 
	 	 	 	 
	9.    Voting of Shares Held under the Plan
	 	 	9	 
	 
	 	 	 	 
	10.  Stock Dividends and Stock Splits
	 	 	9	 
	 
	 	 	 	 
	11.  Rights Offerings
	 	 	9	 
	 
	 	 	 	 
	12.  Death or Incompetence of a Participant
	 	 	9	 
	 
	 	 	 	 
	13.  Amendment, Suspension or Termination of the Plan
	 	 	9	 
	 
	 	 	 	 
	14.  Notices
	 	 	10	 
	 
	 	 	 	 
	15.  Income Tax Considerations Relating to the Plan
	 	 	10	 
	 
	 	 	 	 
	16.  Administration
	 	 	13	 
	 
	 	 	 	 
	17.  Liability of the Company and the Agent
	 	 	13	 
	 
	 	 	 	 
	18.  Governing Law
	 	 	18	 
	 
	 	 	 	 
	19.  Effective Date
	 	 	18	 

 

 

Brookfield Properties Corporation

Dividend Reinvestment Plan

Summary

The following describes the Dividend Reinvestment Plan of Brookfield Properties Corporation which
became effective on May 12, 2009. For further details, please read the full text of the Plan as
well as the questions and answers that follow. Shareholders should consult their tax advisers about
the tax consequences which will result from their participation in the Plan.

The Dividend Reinvestment Plan is a convenient and cost-effective way to increase your investment
in Brookfield Properties Corporation.

You have the option of either receiving cash dividends or automatically reinvesting all or a
portion of your cash dividends in our common shares.

The Plan helps you increase your investment in our common shares by offering you convenience:

	•	 	Dividends are reinvested automatically
	 
	•	 	
Your investment in our common shares is administered for you
	 
	•	 	You receive regular statements and income

tax slips and attractive cost savings:

	•

•	 	No brokerage commissions

No service charges

 

 

Brookfield Properties Corporation

Dividend Reinvestment Plan

Questions And Answers

What is the Dividend Reinvestment Plan?

The Dividend Reinvestment Plan (the “Plan”) of Brookfield Properties Corporation (the “company”)
enables holders of the company’s common shares (“common
shares”) who are residents of Canada or the United States to acquire additional common shares by
reinvesting their cash dividends.

What are the advantages of the Plan?

As common shares acquired under the Plan are treasury shares purchased directly from the company,
participants in the Plan (“participants”) do not pay brokerage commissions or service charges of
any kind. All administrative costs of the Plan are borne by the company.

Full investment of all cash dividends is possible since fractional shares will be credited to a
participant’s account.

Who is eligible to participate?

Any registered or beneficial holder of common shares who is a resident of Canada or the United
States may participate in the Plan.

How does an eligible shareholder become a participant in the Plan?

A registered shareholder may enroll in the Plan by completing the attached participation form and
returning it to CIBC Mellon Trust Company (the “Agent”). A completed participation form must be
received by the Agent no later than five business days prior to the record date for any cash
dividend (which will usually be the first business day of the month in which the dividend is
payable) in order for that dividend to be reinvested under the Plan.

If a participant is a beneficial owner whose common shares are registered in the name of CDS
Clearing and Depository Services Inc. (“CDS”) or The Depository Trust Company (“DTC”) or a name
other than the participant’s own name, he or she may participate in the Plan by (i) having those
common shares transferred into his or her name directly and then enrolling such common shares in
the Plan or (ii) making appropriate arrangements with the broker, investment dealer, financial
institution or other nominee who holds the participant’s common shares to enroll in the Plan on the
participant’s behalf.

Will it be possible for participants to receive a proportion of their dividends in cash and have the remainder reinvested?

Yes. Shareholders may elect to reinvest either 50% or 100% of the cash dividends paid on all common
shares registered in their names by so indicating on the participation form. Where no preference is
indicated, 100% of a participant’s cash dividends will be reinvested.

Regular quarterly statements of account will be mailed to each participant (or, in the case of CDS
participants and DTC participants, CDS or DTC, as the case may be, will receive such statement on
behalf of beneficial owners participating in the Plan).

How will new common shares be purchased for participants?

The Company will pay to the Agent the cash dividends paid on the common shares registered in the
name of a participant, in addition to the cash dividends paid on the common shares held by the
Agent for the account of a participant under the Plan. Depending upon the election of the
participant, the Agent will apply these funds to purchase common shares from the company which will
be held by the Agent for the account of the participant.

 

 

What will be the price of new common shares purchased under the Plan?

The price of common shares purchased under the Plan will be the weighted average price at which
board lots of common shares have traded on the New York Stock Exchange during the period of five
trading days immediately preceding the relevant reinvestment date.

Will certificates be issued for the new common shares?

No. However, a registered shareholder may at any time obtain a certificate for any number of whole
common shares held for the account of the participant under the Plan by writing to the Agent. This
written notice must be received no later than five business days prior to the record date.
Certificates for less than five common shares will not be issued except upon withdrawal from or
termination of the Plan. If the request is received by the Agent between five business days prior
to the dividend record date and the dividend payment date, the certificate will not be issued until
after the dividend payment date and the reinvestment of that dividend under the Plan.

Are there restrictions on dealing with common shares purchased under the Plan?

Yes. Common shares held for a participant’s account may not be pledged, sold or otherwise
transferred. Therefore, prior to a transaction of this type, a registered holder must request that
a share certificate be issued. Certificates will not be issued for fractional shares. Participants
who are beneficial owners must make appropriate arrangements with the broker, investment dealer,
financial institution or other nominee who holds the participant’s common shares prior to such
transactions.

How does a participant terminate participation in the Plan?

Participation in the Plan may be terminated at any time by giving written notice to the Agent (or,
in the case of beneficial owners, by making arrangements to terminate participation through their
nominee).

When participation is terminated, or upon suspension or termination of the Plan by the company,
certificates for whole common shares held for participants under the Plan will be issued to
registered holders and a cash payment will be made for any fractional shares.

When is termination effective?

If notice of termination is received by the Agent between five business days prior to the dividend
record date and the dividend payment date, the participant’s account will not be closed until after
the dividend payment date and the reinvestment of that dividend under the Plan. Otherwise,
termination will be effective with respect to the next quarterly dividend.

What statements will be sent to participants?

After each dividend payment date, a statement of account will be mailed to each participant (or, in
the case of CDS participants and DTC participants, CDS or DTC, as the case may be, will receive
such statement on behalf of beneficial owners participating in the Plan). The statements are a
continuing record of purchases made under the Plan and should be retained for tax purposes. In addition, the Agent will annually
provide each participant with appropriate information for tax reporting purposes.

 

 

What are the tax consequences of participation in the Plan?

Dividend reinvestment pursuant to the Plan does not relieve participants of any liability for taxes
that may be payable on such dividends. A summary explanation of the tax implications of
participation in the Plan can be found in section 15 of the Plan, under the heading “Income Tax
Considerations Relating to the Plan.” All participants are advised to consult with their own tax
advisors to determine the particular tax consequences that may result from their participation in
the Plan and the subsequent sale by them of common shares purchased pursuant to the Plan.

Where should further inquiries be directed?

Inquiries should be addressed to the Agent as follows:

	 	 	 
	By telephone:

	 	CIBC Mellon Trust Company Shareholder Services 416-643-5500

Toll-free throughout North America 1-800-387-0825
	 
	 	 
	By fax:

	 	InvestorFax 416-643-5501
	 
	 	 
	By mail:

	 	CIBC Mellon Trust Company P.O. Box 7010 Adelaide Street
Postal Station Toronto, ON M5C 2W9 Attention: Dividend
Reinvestment Services
	 
	 	 
	By email:

	 	inquiries@cibcmellon.com

Inquiries can also be addressed to the company’s head office as follows:

	 	 	 
	By telephone:

	 	Brookfield Properties Corporation 212-417-7000
	 
	 	 
	By fax:

	 	Investor Relations 212-417-7214
	 
	 	 
	By mail:

	 	Brookfield Properties Corporation Three World Financial
Center 200 Vesey Street New York, New York 10281

 

 

Brookfield Properties Corporation

Dividend Reinvestment Plan

1. The Plan

The Dividend Reinvestment Plan (the “Plan”) of Brookfield Properties Corporation (the “company”)
provides a convenient means for eligible holders of common shares of the company (“common shares”)
to purchase additional common shares by reinvesting their cash dividends.

The declaration and payment of dividends on the company’s common shares is at the discretion of the
company’s board of directors, which supports a stable and consistent dividend policy. The company
presently pays quarterly dividends on its common shares and it is the company’s intention to
continue to review the payout of dividends quarterly on March 31, June 30, September 30 and
December 31 of each year and to adjust the amount to reflect its cash flow.

Under the Plan, common shares will be acquired at 100% of their “Market Price” (as defined below).
As these common shares will be treasury shares purchased directly from the company, no brokerage
commissions or service charges will be payable. All administrative costs of the Plan will be paid
by the company.

Through the reinvestment of cash dividends, the company will acquire additional capital funds which
will be used for its general corporate purposes.

2. Eligibility

Any beneficial or registered holder of common shares who is a resident of Canada or the United
States and meets the requirements below is eligible to become a participant in the Plan (a
“participant”).

3. How the Plan Works

A participant may elect to reinvest either 50% or 100% of the cash dividends paid on all common
shares owned by him or her. Depending upon the election, either 50% or 100% of the cash dividends
paid on the common shares owned by the participant will be applied automatically on each dividend
payment date (an “Investment Date”) to purchase additional common shares under the Plan. All
dividends paid on common shares acquired under the Plan and held for the account of the participant
will be automatically reinvested in additional common shares on each subsequent Investment Date.

The price that will be paid for common shares under the Plan on any Investment Date (the “Market
Price”) will be the weighted average price at which board lots of common shares have traded on the
New York Stock Exchange (the “NYSE”) during the period of five trading days immediately preceding
the relevant Investment Date on which at least one board lot of common shares has traded, as
reported by the NYSE.

On each Investment Date, the company will pay to CIBC Mellon Trust Company, the administrator of
the Plan, (the “Agent”) the cash dividends otherwise payable to a participant in respect to the
common shares registered in the name of the participant or held by the Agent for the account of the
participant. Any amount required under applicable tax laws to be withheld by the company from cash
dividends paid to any participant and remitted to a taxing authority will be withheld and remitted
as required, with the balance being paid to the Agent for reinvestment on behalf of the participant. Cash dividends paid on the common shares registered
in the name of the participant will be used by the Agent to purchase common shares from the company for the
account of the participant in accordance with the election

 

 

of the participant. All cash dividends paid on common shares held by the Agent for the account of the participant will be used to purchase
common shares from the company for the account of the participant.

Common shares purchased under the Plan will be registered in the name of the Agent, as agent for
the participant, and the participant’s account maintained by the Agent will be credited with the
number of common shares, including fractions computed to three decimal places, equal to the cash
dividends (or relevant percentage) paid on the participant’s common shares divided by the relevant
Market Price.

4. How to Enroll

Registered Shareholders

Eligible registered shareholders may enroll in the Plan at any time by completing a participation
form and sending it to the Agent. Copies of the Plan and participation forms can be obtained from
the Agent at any time. Shareholders should not send share certificates or dividend cheques to the
Agent or the company.

The participation form must be signed by all registered holders of common shares which are
registered in more than one name. Also, if a shareholder’s total holding is registered in different
names (e.g., full name on some share certificates and initials and surname on other share
certificates), a separate participation form must be completed for each different registration
name. If dividends from all shareholdings are to be reinvested under one account, registration must
be identical.

A completed participation form must be received by the Agent no later than five business days prior
to the record date for any cash dividend (which will usually be the first business day of the month
in which the dividend is payable) in order for that dividend to be reinvested under the Plan.

Once a registered shareholder has enrolled in the Plan, participation will continue until the
participant terminates his or her participation (as set forth below) or until the Plan is suspended
or terminated or until the participant changes his or her residence to a country other than Canada
or the United States.

Beneficial Owners of Common Shares

If a shareholder is a beneficial owner of common shares, he or she should contact his or her
broker, investment dealer, financial institution or other nominee who holds his or her common
shares to provide instructions regarding his or her participation in the Plan and to inquire about
any applicable deadlines that the nominee may impose or be subject to and to confirm what fees, if
any, the nominee may charge to enroll all or any portion of such shareholder’s common shares in the
Plan on his or her behalf or whether the nominee’s policies might result in any costs otherwise
becoming payable by the shareholder.

If a participant is a beneficial owner whose common shares are registered in the name of CDS
Clearing and Depository Services Inc. (“CDS”) or The Depository Trust Company (“DTC”) or a name
other than the participant’s own name, he or she may participate in the Plan by (i) having those common shares transferred into his or her name
directly and then enrolling such common shares in the Plan or (ii) making appropriate arrangements
with the broker, investment dealer, financial institution or

 

 

other nominee who holds the participant’s common shares to enroll in the Plan on the participant’s behalf, either as a nominee
that delivers a completed and executed participation form to the Agent in the manner provided in
the Plan, or, if applicable, as a CDS participant or a DTC participant through enrollment by CDS or
DTC, respectively.

If a participant is a beneficial owner of common shares and wishes to enroll in the Plan through a
CDS participant or a DTC participant in respect to his or her common shares registered through CDS
or DTC, appropriate instructions must be received by CDS or DTC, as applicable, from the CDS
participant or DTC participant not later than such deadline as may be established by CDS or DTC, in
order for the instructions to take effect on the Investment Date to which that dividend record date
relates.

Instructions received by CDS or DTC after their internal deadline will not take effect until the
following Investment Date. CDS participants and DTC participants holding common shares on behalf of
beneficial owners of common shares registered through CDS or DTC must arrange for CDS or DTC, as
applicable, to enroll such common shares in the Plan on behalf of such beneficial owners in respect
to each dividend payment date.

CDS or DTC, as applicable, will provide instructions to the Agent regarding the extent of its
participation in the Plan, on behalf of beneficial owners of common shares, in respect to every
Investment Date on which cash dividends otherwise payable to CDS or DTC, as applicable, as
shareholder of record, are to be reinvested under the Plan.

Any common shares acquired outside of the Plan which are not registered in exactly the same name or
manner as common shares enrolled in the Plan will not be automatically enrolled in the Plan. If a
participant purchases additional common shares outside the Plan, he or she is advised to contact
the Agent to ensure that all common shares the participant owns are enrolled in the Plan.

5. Certain Limitations

A participant may not transfer the right to participate in the Plan to another person.

Subject to applicable law and regulatory policy, the company reserves the right to determine, from
time to time, a minimum number of common shares that a participant must hold in order to be
eligible to participate in, or continue to participate in, the Plan. Without limitation, the
company further reserves the right to refuse participation in the Plan to, or terminate the
participation of, any person who, in the company’s sole opinion, is participating in the Plan
primarily with a view to arbitrage trading, whose participation in the Plan is part of a scheme to
avoid applicable legal requirements or engage in unlawful behavior or has been artificially
accumulating the company’s securities, for the purpose of taking undue advantage of the Plan to the
company’s detriment. The company may also deny the right to participate in the Plan to any person
or terminate the participation of any participant in the Plan if the company deems it advisable
under any laws or regulations.

 

 

6. Statements of Account

As soon as reasonably practicable after each Investment Date, a statement of account will be mailed
to each participant setting out the amount of the relevant cash dividend reinvested, the applicable
Market Price, the number of common shares purchased under the Plan on the Investment Date and the
total number of common shares, computed to three decimal places, held for the account of the
participant under the Plan (or, in the case of CDS participants and DTC participants, CDS or DTC,
as the case may be, will receive such statement on behalf of beneficial owners participating in the
Plan).

The statements are a continuing record of the cost of the common shares purchased under the Plan
and should be retained for income tax purposes. In addition, the Agent will annually provide each
participant with appropriate information for tax reporting purposes.

7. Certificates for Shares

A registered holder may, at any time, obtain share certificates for any number of whole common
shares held for the participant’s account under the Plan by writing to the Agent. This written
notice must be received no later than five business days prior to the record date. In no event will
certificates be issued for fractional shares. Certificates for common shares acquired under the
Plan will not be issued to participants unless specifically requested. Certificates for less than
five common shares will not be issued except upon withdrawal from or termination of the Plan.

If a request for a share certificate is received by the Agent on or after a dividend record date
but before the related dividend payment date, the requested action will not be taken until after
the dividend payment date.

Common shares held for the account of a participant under the Plan may not be pledged, sold or
transferred. Consequently, a participant or nominee who wishes to effect a transaction of this type
must request that certificates for his or her common shares be issued by the Agent.

Accounts under the Plan are maintained in the names in which the common shares of the participants
were registered at the time they enrolled in the Plan. Consequently, certificates for shares will
be similarly registered when issued.

8. Termination of Participation

A participant may terminate his or her participation in the Plan at any time by giving written
notice to the Agent (or in the case of beneficial owners, by making arrangements to terminate
participation through their nominee). The notice of termination must be received no later than five
business days prior to the record date for a cash dividend in order for the notice to be effective
with respect to that dividend. If notice of termination is received on or after a record date, the
cash dividends payable on the relevant Investment Date will be invested under the Plan and the
termination will be effective only with respect to cash dividends subsequently declared. The notice
of termination must be signed by all registered holders of common shares which are registered in
more than one name.

Upon termination, a registered holder will receive a share certificate for the number of whole
common shares held for his or her account under the Plan and a cash
payment for any fractional share. The cash payment will be calculated on the basis of the closing
price of the common shares on the NYSE on the business day immediately preceding the date of
termination. All subsequent dividends will be paid directly to the shareholder. Participation in
the Plan may be renewed by registered holders at any time by signing a new participation form and
returning it to the Agent.

 

 

9. Voting of Shares Held under the Plan

Whole common shares held for the account of a participant under the Plan on any record date for a
vote of shareholders (as with common shares not subject to the Plan) may be voted by the
participant, either in person or by proxy. Common shares for which instructions are not received
will not be voted. Fractional common shares may not be voted.

10. Stock Dividends and Stock Splits

Stock dividends declared on the common shares and any shares resulting from the subdivision of the
common shares will be credited to the account of the participant based on whole and fractional
shares held for the account of the participant under the Plan.

11. Rights Offering

If the company makes available to holders of common shares of record any right to subscribe for
additional common shares or other securities, rights certificates in respect to the number of whole
common shares then held for the account of the participant under the Plan will be forwarded to each
participant. Where practicable, rights in respect to fractional shares held for the account of a
participant will be sold by the Agent for the participant’s account and the net proceeds forwarded
to the participant.

12. Death or Incompetence of a Participant

Participation in the Plan will not be affected by a participant’s death or incompetence and
participation will remain effective until it is terminated in accordance with the provisions of the
Plan.

13. Amendment, Suspension or Termination of the Plan

The company reserves the right to amend, modify, suspend or terminate the Plan at any time, but
such actions shall have no retroactive effect that would prejudice a participant’s interests. Any
amendments to the Plan are subject to prior approval by the Toronto Stock Exchange. The Agent will
notify participants in writing of any modifications made to the Plan that in the company’s opinion
may materially prejudice participants. Generally, no notice will be given to participants regarding
any amendments to the Plan intended to cure, correct or rectify any ambiguities, defective or
inconsistent provisions, errors, mistakes or omissions.

If the Plan is suspended or terminated by the company, each participant will receive a certificate
for the number of whole common shares held for his or her account and a cash payment for any
fractional share based upon the closing price of the common
shares on the NYSE on the trading day immediately preceding the effective date of termination or
suspension of the Plan.

 

 

If the Plan is suspended or terminated by the company, no investment will be made under the Plan on
any subsequent Investment Date. Dividends that are paid after the effective date of any suspension
or termination of the Plan will be remitted by the company or the Agent, as the case may be,
directly to each participant.

14. Notices

All notices required to be given to a participant will be mailed to the participant at his or her
latest address shown on the records of the Agent. All notices to the Agent and the company should
be mailed to the address shown on page 4 of this brochure.

15. Income Tax Considerations Relating to the Plan

THE FOLLOWING SUMMARY OF TAX CONSEQUENCES IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE
LEGAL OR TAX ADVICE TO ANY PARTICULAR PARTICIPANT. IT IS THE RESPONSIBILITY OF PARTICIPANTS IN THE
PLAN TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF PARTICIPATION IN THE
PLAN IN THEIR RESPECTIVE COUNTRIES OF RESIDENCE.

Canadian Federal Income Tax Considerations

The following is a summary of the principal Canadian federal income tax considerations generally
applicable to participants under the Plan. This summary is based on the current provisions of the
Income Tax Act (Canada) (the “ITA”), the regulations thereunder, all specific proposals to amend
the ITA or the regulations publicly announced by the Minister of Finance (Canada) prior to the date
hereof, and an understanding of the current published administrative practices of the Canada
Revenue Agency. This summary does not take into account Canadian provincial or territorial income
tax laws or those of any country other than Canada.

Participants Resident in Canada

This portion of the summary is applicable only to participants who, for purposes of the ITA, and at
all relevant times, are resident in Canada, hold their common shares as capital property, deal at
arm’s length with the company and are not subject to “mark-to-market” rules relating to securities
held by certain “financial institutions” as defined for purposes of those rules.

Participants will be subject to tax under the ITA on all dividends which are reinvested in common
shares in the same manner as they would have been if they had received the dividends in cash.

The cost to a participant of common shares acquired under the Plan will be the amount paid for the
common shares by the Agent. For the purpose of computing the adjusted cost base of such common
shares to the participant, the cost of the common shares will be averaged with the adjusted cost
base of all common shares held by the participant as capital property. A participant may realize a
capital gain or loss on the disposition of common shares acquired through the Plan.

Participants Resident in the United States

This portion of the summary is applicable only to participants who, for purposes of the ITA, and at
all relevant times, are not resident or deemed to be resident in Canada, do not use or hold and are
not deemed to use or hold their common shares in carrying on business in Canada and do not carry on
an insurance business in Canada and elsewhere.

 

 

Dividends paid or credited to a participant resident in the United States on the common shares,
including dividends reinvested under the Plan, will be subject to Canadian withholding tax at the
rate of 25%, subject to the application of the Canada-U.S. Income Tax Convention (1980), as amended
(the “Treaty”). If the participant is entitled to benefits under the Treaty, the applicable rate of
Canadian withholding tax is generally reduced to 15%. Under the Treaty, dividends paid to certain
religious, scientific, charitable and similar tax-exempt organizations and certain pension
organizations that are resident in, and exempt from tax in, the United States are exempt from
Canadian withholding tax. The amount of dividends to be reinvested under the Plan will be reduced
by the amount of tax withheld.

Gains on the disposition of common shares by a participant resident in the United States are
generally not subject to Canadian income tax unless such shares are or are deemed to be “taxable
Canadian property” within the meaning of the ITA and the participant is not entitled to relief
under the Treaty. Provided the common shares are listed on a designated stock exchange (which
includes the Toronto Stock Exchange and the NYSE), such shares will generally not be taxable
Canadian property to a participant resident in the United States unless, at any time during the
five-year period immediately preceding a disposition, the participant, persons with whom the
participant did not deal at arm’s length or the participant and persons with whom the participant
did not deal at arm’s length owned or had an interest in or option to acquire 25% or more of the
issued shares of any class or series of shares of company.

United States Federal Income Tax Considerations

Notice Pursuant to U.S. Internal Revenue Service Circular 230: You are hereby advised that: (i) any
discussion of U.S. federal tax issues set forth herein, including attachments, is not intended or
written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that
may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended; (ii) such
discussion is written to support the promotion or marketing of the transactions or matters
addressed herein; and (iii) each taxpayer should seek advice based on the taxpayer’s particular
circumstances from an independent tax advisor.

* * * * *

The following is a summary of certain U.S. federal income tax considerations generally applicable
to U.S. participants (as defined below) who reinvest cash dividends in additional common shares
under the Plan. The summary is based upon the Internal Revenue Code of 1986, as amended (the
“Code”), existing and proposed regulations promulgated thereunder, and judicial decisions and
administrative interpretations, all of which are subject to change, possibly with retroactive
effect. As used in this summary, “U.S. participant” means a beneficial owner of common shares held
as capital assets and purchased pursuant to the Plan, if such beneficial owner is, for U.S. federal
income tax purposes:

•     a citizen or resident of the United States;

•     a corporation created or organized in or under the laws of the United States or any political
subdivision thereof;

•     an estate whose income is subject to U.S. federal income taxation regardless of its source; or

•     a trust if (i) a U.S. court can exercise primary jurisdiction over such trust’s administration
and one or more U.S. persons have the authority to control all substantial decisions of such trust
or (ii) such trust has made a valid election to be treated as a U.S. person for U.S. federal income
tax purposes.

 

 

This summary does not address all aspects of the U.S. federal income tax laws that may be relevant
to U.S. participants subject to special treatment under such laws (including but not limited to
banks, dealers in securities or currencies, tax-exempt organizations, insurance companies,
regulated investment companies, financial institutions, persons that beneficially own 5% or more of
the common shares, persons whose functional currency is not the U.S. dollar, and persons that
beneficially own common shares as part of a straddle, hedging, or conversion transaction).

If an entity treated as a partnership for U.S. federal income tax purposes participates in the
Plan, the tax treatment of such partnership and each partner thereof generally will depend upon the
status and activities of the partnership and the partner. Any such partnership or partner thereof
should consult its own tax advisor regarding the U.S. federal income tax considerations relating to
participation in the Plan.

A U.S. participant will be treated for U.S. federal income tax purposes as having received a
distribution in an amount equal to the fair market value of the common shares acquired pursuant to
the Plan plus the amount of any Canadian income tax withheld therefrom. The fair market value of
the common shares so acquired will be equal to the average of the high and low sale prices of the
common shares on the Investment Date as reported on the principal securities exchange on which the
shares are traded, which amount may be higher or lower than the Market Price used to determine the
number of common shares acquired under the Plan. The distribution will be includible in a U.S.
participant’s income as a taxable dividend to the extent of the company’s current and accumulated
earnings and profits as determined for U.S. federal income tax purposes. The amount of any such
dividend will not be eligible for the dividends received deduction generally available to U.S. corporate shareholders on dividends received from a U.S. corporation. Subject to certain
limitations under the Code, U.S. participants may be entitled to a U.S. federal income tax credit
or deduction for Canadian income taxes withheld from such dividends.

A U.S. participant’s tax basis per share for common shares purchased pursuant to the Plan will
equal the fair market value per common share on the Investment Date. A U.S. participant’s holding
period for common shares purchased with dividends will begin on the day following the Investment
Date.

U.S. participants generally will recognize a taxable gain or loss when they sell or exchange
common shares and when they receive cash payments for fractional shares credited to their accounts
upon withdrawal from or termination of the Plan or otherwise. The amount of such gain or loss will
be the difference between the amount a U.S. participant receives for such common shares or fraction
thereof and the adjusted tax basis therefor. The gain or loss will be a capital gain or loss and will be a
long-term capital gain or loss if the holding period for such common shares or fraction thereof exceeds one year. For taxable years beginning on or
before December 31, 2010, long-term capital gain of a non-corporate U.S. holder generally is taxed
at a maximum rate of 15%. The deductibility of capital losses is subject to limitations. Gain or
loss recognized by a U.S. participant generally will be treated as gain or loss from sources within
the U.S. for foreign tax credit limitation purposes.

 

 

The tax considerations set forth above may differ materially if the company is regarded as a
“passive foreign investment company” (“PFIC”). The company believes that it was not a PFIC in 2008,
and it does not expect to become one in 2009. However, because this determination is made annually
at the end of each taxable year and is dependent upon a number of factors (some of which are beyond
the company’s control), including the value of its assets and the amount and type of its income,
there can be no assurance that the company will not be treated as a PFIC in any taxable year or
that the Internal Revenue Service will agree with the company’s conclusion regarding its PFIC
status. If the company is a PFIC in any taxable year, U.S. participants could suffer adverse
consequences under the PFIC rules, including the possible treatment of gain from the sale, exchange
or other disposition of common shares as ordinary income and the imposition of an interest charge
on a portion of the resulting tax liability.

16. Administration

The Agent will act as administrator of the Plan for the company and will maintain an account for
each participant. The Agent will keep all records necessary for the administration of the Plan.

The company reserves the right to interpret and regulate the Plan as it deems necessary or
desirable.

Unless the context requires otherwise, words importing only the singular number shall include the
plural and vice versa, words importing the masculine gender shall include feminine and neuter
genders and vice versa, and works importing persons shall include individuals, partnerships,
associations, trusts, unincorporated organizations and corporations.

17. Liability of the Company and the Agent

The company and the Agent, in administering the Plan, are not liable for any act or omission to
act, including, without limitation, any claims of liability: (a) with respect to receipt or
non-receipt of any payment, form or other writing purported to have been sent to the company or the
Agent; (b) actions taken as a result of inaccurate and incomplete information or instructions; (c)
in respect to any decision to amend, suspend, terminate or replace the Plan in accordance with the
terms hereof; (d) in respect to the involuntary termination of a participant’s participation in the
Plan in the circumstances described herein; (e) with respect to the prices at which common shares
are purchased for a participant’s account and the times such purchases are made; or (f) in respect
to income taxes or other liabilities payable by any participant or beneficial owner in connection
with their participation in the Plan.

Participants should recognize that neither the company nor the Agent can assure profit or protect
against a loss on common shares acquired under the Plan.

Both the company and the Agent shall have the right to reject any request regarding enrollment in,
withdrawal from or termination of the Plan if such request is not received in proper form. Any such
request will be deemed to be invalid until any irregularities have been resolved to the company’s
satisfaction and/or the Agent’s satisfaction. Neither the company nor the Agent is under any
obligation to notify any shareholder of an invalid request.

 

 

18. Governing Law

The Plan shall be governed and construed in accordance with the laws in force of the province of
Ontario, Canada.

19. Effective Date

The effective date of the Plan is May 12, 2009.kl05014_ex10-1.htm

    
      

    

    AMENDED AND RESTATED

    EMPLOYMENT
AGREEMENT

     

    THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(this “Agreement”) is made this 13th day of May, 2009, by and between VISHAY INTERTECHNOLOGY,
INC., a Delaware corporation (“Vishay”), and DR.  FELIX ZANDMAN (the
“Executive”).

     

    W I T N E
S S E T H:

     

    WHEREAS,
Vishay and Executive are parties to an
Amended and Restated Employment Agreement dated January 1, 2004 (the “Original Agreement”); and

     

    WHEREAS, Section 8.5 of
the Original Agreement provides that Vishay and
Executive may amend the
Original Agreement by mutual agreement in
writing; and

     

    WHEREAS, in recognition of
Executive’s significant prior and future
service to Vishay, and in order to eliminate the obligations of Vishay set
forth in Section 6.2(b)(ii) and Section 6.3 of the Original
Agreement, Vishay and
Executive desire to amend and restate the Original Agreement in its entirety;
and

     

    WHEREAS, Vishay desires to continue to employ Executive,
and Executive desires to accept
continued employment by Vishay
upon the terms and conditions of the employment relationship as
hereinafter set forth.

     

    NOW,
THEREFORE, in consideration of the mutual covenants hereinafter contained, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as
follows:

     

    1.    Definitions.

     

    1.1.    “Accrued Compensation”
means (i) earned but unpaid base salary and (ii) unpaid expense
reimbursements.

     

    1.2.    “Board of Directors”
means the Board of Directors of Vishay.

     

    1.3.    “Cause” means any of
the following:

     

    (a)    Executive’s
conviction of a felony or any other crime involving moral turpitude (whether or
not involving Vishay and/or its subsidiaries);

     

    (b)    any act
or failure to act by Executive involving dishonesty, fraud, misrepresentation,
theft or embezzlement of assets from Vishay and/or its subsidiaries;
or

     

    (c)    Executive’s
(i) willful and repeated failure to substantially perform his duties under this
Agreement (other than as a result of Disability) or (ii) willful and repeated
failure to substantially comply with any policy of Vishay and/or its
subsidiaries applicable to Executive; provided, however, that a termination
pursuant to this clause (c) will not become effective unless Executive fails to
cure such failure to perform or comply within thirty (30) days after
written notice thereof from Vishay.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.4.    “Change in Control”
shall have the meaning given it under the Vishay Intertechnology, Inc. 2007
Stock Incentive Program (as amended and restated effective April
2008).

     

    1.5.    “Code” means the
Internal Revenue Code of 1986, as amended, or any successor code.

     

    1.6.     “Common Stock” means
the common stock, par value $.10 per share, of Vishay and any other security
exchanged or substituted for such common stock or into which such common stock
is converted in any recapitalization, reorganization, merger, consolidation,
share exchange or other business combination transaction, including any
reclassification consisting of a change in par value or a change from par value
to no par value or vice versa.

     

    1.7.    “Competing Business”
means any business or venture located anywhere in the world that is engaged in
the manufacture and supply of passive and discrete active electronic components
and/or strain gages, strain gage transducers or strain gage instrumentation to
the extent Vishay or any subsidiary of Vishay is engaged in such activities on
the Date of Termination.

     

    1.8.    “Date of Termination”
means (i) the effective date on which Executive’s employment by Vishay
terminates as specified in a Notice of Termination by Vishay or Executive, as
the case may be or (ii) if Executive’s employment by Vishay terminates by reason
of death, the date of Executive’s death.

     

    1.9.    “Deferred Compensation
Plan” means the Vishay Intertechnology, Inc. Nonqualified Deferred
Compensation Plan, as in effect from time to time, or any successor
plan.

     

    1.10.    “Disability” shall
have the meaning given it under the Vishay Intertechnology, Inc. 2007 Stock
Incentive Program (as amended and restated effective April 2008).

     

    1.11.    “Effective Date” means
the date first indicated above.

     

    1.12.    “Good Reason” means,
without Executive’s express written consent, the occurrence of any of the
following events:

     

    (a)    any
material and adverse change in Executive’s titles, offices, duties or
responsibilities (including reporting responsibilities) from those set forth in
this Agreement;

     

    (b)    a
reduction in Executive’s annual base salary (as the same may be increased from
time to time after the Effective Date);

     

    (c)    relocation
of Executive’s principal place of performance to a location more than 30 miles
from Malvern, Pennsylvania or such other location as may be determined by the
Board of Directors pursuant to Section 3.4 hereof; or

     

     

    
      
        
        

      

      
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    (d)    any other
material breach of this Agreement by Vishay that is not remedied by Vishay
within thirty (30) days after receipt by Vishay of notice thereof from
Executive.

     

    Notwithstanding
the foregoing, an isolated and inadvertent action taken by Vishay in good faith
which is remedied by Vishay within twenty (20) days after receipt by Vishay of
notice thereof from Executive shall not constitute Good Reason.

     

    1.13.    “LIBOR” means the
London Inter-Bank Offered Rate as in effect from time to time.

     

    1.14.    “Non-Competition
Period” means the period commencing upon the Date of Termination and
continuing for the remainder of Executive’s life or such lesser period as is
determined by Vishay, in its discretion, or by a court of competent jurisdiction
pursuant to Section 9.5(d).

     

    1.15.    “Non-Solicitation
Period” means the period commencing upon the Date of Termination and
continuing for the remainder of Executive’s life or such lesser period as is
determined by a court of competent jurisdiction pursuant to Section
9.5(d).

     

    1.16.    “Notice of
Termination” means a written notice of termination of Executive’s
employment with Vishay, signed by Executive, if to Vishay, or by a duly
authorized officer of Vishay, if to Executive, which notice shall (i) indicate
the specific termination provision in this Agreement relied upon; (ii) to the
extent applicable, set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive’s employment under the
provision so indicated; and (iii) specify the Date of Termination.  The failure by Executive or Vishay to set
forth in such notice any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of Executive or Vishay hereunder
or preclude Executive or Vishay from asserting such fact or circumstance in
enforcing Executive’s or Vishay’s rights hereunder.

     

    2.    Employment;
Term.

     

    2.1.    “Employment.  Vishay hereby employs Executive, and
Executive hereby accepts employment by Vishay, in accordance with and subject to
the terms and conditions set forth herein.

     

    2.2.    Term.  The “Term” of this Agreement shall
commence on the Effective Date and continue until terminated in accordance with
the provisions of this Agreement.

     

    3.    Duties.

     

    3.1.    Position.  During the Term, Executive shall serve as
Chief Technical and Business Development Officer of Vishay, reporting directly
to the Board of Directors (or, at the direction of the Board of Directors, to
the Chief Executive Officer of Vishay), and as Executive Chairman of the Board
of Directors.

     

     

    
      
        
        

      

      
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    3.2.    Authority and
Responsibility.  Executive
shall have such authority and responsibility as is customary for the executive
chairman of the board of directors and the chief technical and business
development officer of a major multi­-national corporation.

     

    3.3.    Activity.  Excluding any periods of vacation,
personal and sick leave to which Executive is entitled, Executive shall devote
his full professional attention and best efforts during the Term to the business
and affairs of Vishay.  It shall not
be considered a violation of the foregoing for Executive to (i) serve on
corporate, industry, civic or charitable boards or committees or (ii) manage
personal investments, so long as such activities would be permitted under
Section 9 and do not interfere with the performance of Executive’s
responsibilities as an employee of Vishay in accordance with this
Agreement.

     

    3.4.    Place of
Performance.  Executive’s
employment and office shall be based at Vishay’s offices in Malvern,
Pennsylvania or such other location not more than 30 miles from Malvern,
Pennsylvania as the Board of Directors shall determine.  Executive recognizes that his duties will
require reasonable travel to domestic and international locations, at Vishay’s
expense.

     

    4.    Compensation.

     

    4.1.    Base Salary.  Vishay shall pay Executive a base salary,
subject to annual review by the Compensation Committee of the Board of
Directors, of not less than $975,000 per year.  Such base salary shall be paid in
accordance with Vishay’s standard salary policies as they exist from time to
time, subject to such deductions, if any, as are required by law or elected by
Executive (for example, 401(k) contributions).

     

    4.2.    Bonus.  Executive shall be entitled to an annual
performance bonus pursuant to the Vishay Intertechnology Section 162(m) Cash
Bonus Plan (the “Cash Bonus Plan”) or any successor plan.  Such bonus shall be payable in cash, equal
to the lesser of (i) 3.0% of Vishay’s adjusted net income, as determined under
the terms of the Cash Bonus Plan, and (ii) three times Executive’s base salary
for the year in which the bonus is earned.  Although the Board of Directors intends
that the Cash Bonus Plan be the primary vehicle for the Executive’s bonus, the
Board of Directors retains the authority to grant additional bonuses in excess
of the limits under the Cash Bonus Plan.

     

    4.3.    Mandatory Deferral of
Compensation.  To the extent
that all or a portion of Executive’s compensation payable hereunder, after
taking into account all other compensation Executive receives from Vishay, is
not deductible by Vishay by operation of Section 162(m) of the Code or any other
similar regulatory limitation, Vishay shall not pay such compensation to
Executive and, in lieu thereof, shall credit the amount of such compensation to
Executive’s account under the Deferred Compensation Plan.

     

    4.4.    Phantom Stock
Awards.  As of January 1 of
each year of the Term, Vishay shall grant Executive 5,000 shares of phantom
common stock.  Such phantom stock
shall be fully vested on the date of grant and shall be payable in Common Stock
within 30 days after the Date of Termination.  Such phantom stock awards shall be granted
under, and subject to the terms of, the Vishay Intertechnology, Inc.  Senior Executive Phantom Stock Plan or any
successor plan.

     

    5.    Benefits.

     

     

     

    
      
        
        

      

      
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    5.1.    Participation in Benefit
Plans and Programs.  During the
Term, Executive shall be entitled to participate in any and all medical
insurance, group health insurance, disability insurance, life insurance and
retirement plans which are generally made available by Vishay to its senior
executives, subject to the eligibility requirements and other provisions of such
plans and programs.

     

    5.2.    Pension.  Vishay shall provide Executive with a
pension, as set forth in Attachment A hereto, providing annual annuity payments
for Executive’s life equal to the lesser of (i) 50% of Executive’s average
base salary and the average annual bonus to which Executive was entitled
(without regard to whether Executive waived payment of all or part of such
bonus) for the five calendar years preceding the Executive’s termination of
employment and (ii) $1,000,000.

     

    5.3.    Deferred Compensation
Plan.  As of each January 1 of
the Term, Vishay shall credit $150,000 to
Executive’s account under the Deferred Compensation Plan.  In addition, Executive shall be entitled
to make voluntary deferrals in accordance with the terms of the Deferred
Compensation Plan.

     

    5.4.    Reimbursement of
Expenses.  In accordance with
Vishay’s standard reimbursement policies as they exist from time to time, Vishay
shall reimburse Executive for all reasonable and documented travel, business
entertainment and other business expenses incurred by Executive in connection
with the performance of his duties under this Agreement.

     

    5.5.    Vacation, Personal and Sick
Days.  Executive shall be
entitled to paid vacation days, holidays, personal and sick days in accordance
with and subject to Vishay’s policies for Vishay’s senior executives, as in
effect from time to time.

     

    5.6.    Indemnification.  Vishay shall indemnify Executive to the
extent provided in Vishay’s certificate of incorporation and/or bylaws, as in
effect from time to time.

     

    5.7.    Other.  Executive shall be entitled to such other
benefits or perquisites as Vishay generally makes available to its senior
executives.

     

    6.    Supplemental Contract
Payments.

     

    6.1.    General.  Executive
is entitled to six (6) separate cash payments in the amount of $10,000,000 (Ten
Million Dollars) (each a “Contract Payment”) payable as follows, subject to
Sections 6.2 through 6.5:

     

    6.1.1.    Upon the
Effective Date, Vishay will pay or cause to be paid the first Contract Payment
to or as directed by Executive; and

     

    6.1.2.    On each
of the first five (5) anniversaries of the Effective Date or, in Vishay’s
discretion, such later date during the calendar year in which any such
anniversary occurs as is specified by Vishay (each a “Payment Date”), Vishay
will pay or cause to be paid a Contract Payment to or as directed by Executive
(or his estate, if applicable).

     

    Nothing
in this Section 6 shall affect Executive’s rights to any other compensation and
benefits provided for under this Agreement.

     

     

     

    
      
        
        

      

      
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    6.2.    Termination of Employment
without Cause
or Resignation with Good Reason.

     

    6.2.1.    Prior to a Change in
Control.  In the event Executive’s employment with Vishay is
terminated by Vishay without Cause or by Executive with Good Reason, in each
case prior to a Change in Control of Vishay, such termination shall not affect
Executive’s right (or his estate’s right, if applicable) to receive all of the
Contract Payments that have not yet been paid as of the date of such
termination, and each Contract Payment that remains unpaid shall be paid to or
as directed by Executive (or his estate, if applicable) on the applicable
Payment Date.

     

    6.2.2.    Following a Change in
Control.  In the event Executive’s employment with Vishay is
terminated by Vishay without Cause or by Executive with Good Reason, in each
case after a Change in Control of Vishay, payment of any and all of the Contract
Payments that have not yet been paid as of the date of such termination shall be
accelerated and paid to or as directed by Executive immediately upon such
termination.

     

    6.3.    Termination by Reason of
Death or
Disability. In the event of Executive’s death while employed with
Vishay, or in the event Executive’s employment with Vishay is terminated by
Vishay or by Executive due to Executive’s Disability, such death or termination
of employment shall not affect Executive’s right (or his estate’s right, if
applicable) to receive all of the Contract Payments that are not yet required to
be paid as of the date of his death or termination due to Disability, and each
Contract Payment that remains unpaid shall be paid to or as directed by
Executive (or his estate, if applicable) on the applicable Payment Date;
provided, however, that in the event of a Change in Control of Vishay, whether
before or after such death or termination, payment of any and all of the
Contract Payments that have not yet been paid as of the later of the date of
such death or termination and the Change of Control of Vishay shall be
accelerated and paid to or as directed by Executive (or his estate, if
applicable) immediately upon the later to occur of such death or termination or
such Change in Control.

     

    6.4.    Termination of Employment
with Cause or without Good Reason.  In the event Executive’s
employment with Vishay is terminated by Vishay with Cause or by Executive
without Good Reason, any and all of the Contract Payments which have not yet
been paid will  immediately and automatically, without any action on
the part of Vishay, be forfeited, and Executive will have no further rights with
respect to those Contract Payments.

     

    6.5.    Delay of Contract
Payments.  Notwithstanding anything in this Section 6 to the
contrary, if the making of any Contract Payment on an applicable Payment Date
would jeopardize the ability of Vishay and each of its subsidiaries for which
Executive performs services on the applicable Payment Date (or performed
services on the date Executive’s employment terminated) to continue as a
going concern (as determined by the Board of Directors and only if disclosed in
a filing by Vishay with the U.S. Securities and Exchange Commission), such
Contract Payment will be paid, with interest at LIBOR, as soon as the making of
the Contract Payment would no longer jeopardize the ability of Vishay or of such
subsidiary to continue as a going concern.

     

    7.    Termination of Employment;
Compensation Upon Termination.

     

     

    
      
        
        

      

      
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    7.1.    Termination.  Executive’s employment with Vishay may be
terminated at any time under the following circumstances:

     

    (a)    Death.  Executive’s employment hereunder shall
terminate upon Executive’s death.

     

    (b)    Termination by
Vishay.  Vishay may terminate
Executive’s employment with or without Cause, by Notice of Termination to
Executive, provided, however, that Vishay shall not terminate Executive’s
employment without Cause unless it gives Executive no less than thirty (30) days
written notice.  Solely for
purposes of this Section 7.1, a termination due to Executive’s Disability shall
be equivalent to a termination by Vishay without Cause.

     

    (c)    Termination by
Executive.  Executive may
terminate his employment with or without Good Reason or due to Executive’s
Disability, by Notice of Termination to Vishay, provided, however, that
Executive shall not terminate his employment without Good Reason unless he gives
Vishay no less than thirty (30) days written notice.

     

    7.2.    Compensation Upon
Termination.

     

    (a)    General.  Upon termination of Executive’s employment
with Vishay, Executive shall be entitled to the following:

     

    (i)    A lump
sum cash payment equal to all Accrued Compensation, such payment to be made
within 15 days after the Date of Termination.

     

    (ii)    Payment
of Executive’s bonus pursuant to Section 4.2 hereof for the calendar year
preceding the Date of Termination, if not previously paid, which shall be paid
at such time as such bonus would have been paid to Executive if not for
Executive’s termination of employment.

     

    (iii)    Payment
of the phantom stock awards pursuant to Section 4.4.

     

    (iv)    Payment
of Executive’s account under the Deferred Compensation Plan pursuant to the
terms of such plan.

     

    (v)    At
Executive’s (or his surviving spouse’s) election, either continued eligibility
for medical benefits under a plan sponsored by Vishay for its senior executives
or a reimbursement to Executive for privately obtained coverage, in either case
for the life of Executive and his surviving spouse.  The annual cost to Vishay, whether as
reimbursement or premium costs, shall not exceed $15,000 (or, if less, the
amount Vishay then pays for medical coverage for its senior executives),
provided, however, that Executive or his surviving spouse shall be permitted to
continue coverage and pay any cost in excess of such limit.

     

    (b)    Termination by Vishay
Without Cause; Termination by Executive With Good Reason.  In addition to the foregoing, in the event
Executive’s employment with Vishay is terminated by Vishay without Cause or by
Executive with Good Reason, Executive

     

     

     

     

    
      
        
        

      

      
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      shall be
entitled to payment of the amount Executive would have received (if not for
Executive’s termination of employment) as a bonus pursuant to Section 4.2 hereof
for the calendar year of the Date of Termination, which amount shall be paid at
such time as such bonus would have been paid to Executive if not for Executive’s
termination of employment.

    

     

    8.    Section 280G and 409A of the
Code.

     

    8.1.    Section
280G.

     

    8.1.1.    It is the
understanding of the parties hereto that no payment provided for under this
Agreement is contingent upon or related to a change in ownership or control of
Vishay, or change in ownership of assets of Vishay, within the meaning of
Section 280G of the Code, and all such payments are to be paid without regard to
such occurrence.

     

    8.1.2.    Notwithstanding
the foregoing, in view of the fact that the Internal Revenue Service might
assert that all or some payments paid or payable on account of Executive’s
service to Vishay (or its successor) are contingent upon a change in ownership
or control of Vishay, or change in ownership of assets of Vishay, within the
meaning of Section 280G of the Code, the parties hereto agree as follows:
 In the event that the aggregate of all or some of the payments or benefits
made or provided to Executive under this Agreement (the “Aggregate Payments”) is
determined to constitute a Parachute Payment, as such term is defined in Section
280G(b)(2) of the Code, or any successor provision, Vishay shall pay to
Executive, at the time the applicable excise tax
is required to be withheld by Vishay and remitted to the Internal Revenue
Service or five (5) business days before it is required to be paid by
Executive, the amount of any excise tax imposed by Section 4999 of
the Code, or any successor provision (“Excise Tax”), payable with respect to
such Aggregate Payment, plus an additional payment in an amount such that after
payment by Executive of all taxes, including, without limitation, any income,
employment and excise tax (including any interest or penalties imposed with
respect to such taxes) imposed upon such additional payment, the Executive
retains an amount of such additional payment equal to the Excise Tax imposed
upon the Aggregate Payment.  The
determination of whether the Aggregate Payment constitutes a Parachute Payment
and, if so, the amount to be paid to Executive and the time of payment pursuant
to this Section 8.1, shall be made by an independent auditor (the “Auditor”)
selected and paid by Vishay; provided, however, that the Auditor shall be a
nationally recognized United States public accounting firm.  Notwithstanding the foregoing, in the
event that the amount of Executive’s Excise Tax liability is subsequently
determined to be greater than the Excise Tax liability with respect to which an
initial payment to Executive under this Section 8.1 has been made, Vishay shall
pay to Executive an additional amount with respect to such additional Excise Tax
(and any interest and penalties thereon) at the time that the amount of the
actual Excise Tax liability is finally determined, such additional amount to be
calculated in the same manner as such initial payment.  In the event that the amount of
Executive’s Excise Tax liability is subsequently determined to be less than the
Excise Tax liability with respect to which
an initial payment to Executive under this Section 8.1 has been made, Executive,
at the time that the amount of the actual Excise Tax liability is finally
determined, shall pay to Vishay the amount by which such initial payment exceeds
the amount of Executive’s Excise Tax liability.  Executive and Vishay shall cooperate with
each other in connection with any action, arbitration, suit, investigation or
proceeding (collectively, “Proceeding”) relating to the existence or amount of
liability for Excise Tax, and all expenses

     

     

     

    
      
        
        

      

      
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    relating
to any such Proceeding (including all reasonable attorney’s fees and other
expenses incurred by Executive in connection therewith) shall be paid by Vishay
promptly upon notice of demand from Executive.

     

    8.2.    Section 409A.

     

    8.2.1.    All payments and benefits provided to Executive pursuant
to this Agreement shall be interpreted, to the extent
permissible under applicable law, so as to
avoid any sanctions under Section 409A of
the Code.  If any payment or benefit cannot be provided or made at the
time specified herein without incurring sanctions under Section 409A of the
Code, then such benefit or payment shall be provided in full at the earliest
time thereafter when such sanctions will not be imposed.

     

    8.2.2.    If the termination giving rise to the payments described
in Section 4.4, Section 5.2 and
Section 6 is not a “Separation from
Service” within the meaning of Treas. Reg. § 1.409A-1(h)(1) (or any successor
provision), then the amounts otherwise payable pursuant to those Sections will
instead be deferred without interest and will not be paid until Executive
experiences a Separation from Service.  In addition, to the extent
compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any
successor provision) is necessary to avoid the application of an additional tax
under Section 409A of the Code to payments due to Executive upon or following
his Separation from Service, then notwithstanding any other provision of this
Agreement (or any otherwise applicable plan, policy, agreement or arrangement),
any such payments that are otherwise due within six months following Executive’s
Separation from Service (taking into account the preceding sentence of this
paragraph) will be deferred without interest and paid to Executive in a lump sum
immediately following that six month period. If
Executive dies during the postponement period prior to payment of
the postponed amount, the amounts withheld
on account of Section 409A of the Code
shall be paid to the Executive’s estate
within 10 days after the date of the Employee’s
death.  This Section 8.2.2
should not be construed to prevent the application of Treas. Reg. §§
1.409A-1(b)(4) or -1(b)(9)(iii) (or any successor provisions) to any amount
payable to Executive.  For purposes of the application of Treas. Reg.
§ 1.409A-1(b)(4) (or any successor provision) to this Agreement, each payment in
a series of payments will be deemed a separate payment.

     

    8.2.3.    Notwithstanding anything in this Agreement to the
contrary or otherwise, to the extent an expense, reimbursement or in-kind
benefit provided pursuant to this Agreement constitutes a “deferral of
compensation” within the meaning of Section 409A of the Code (i) any reimbursement shall be for expenses incurred
during Executive’s and his
surviving spouse’s lifetime (or during a
shorter period of time specified in this Agreement), (ii) the amount of
expenses eligible for reimbursement or in-kind benefits provided to Executive
during any calendar year will not affect the amount of expenses eligible for
reimbursement or in-kind benefits provided to Executive in any other calendar
year, (iii) the reimbursements for expenses for which Executive is
entitled to be reimbursed shall be made on or before the last day of the
calendar year following the calendar year in which the applicable expense is
incurred and (iv) the right to payment or reimbursement or in-kind
benefits hereunder may not be liquidated or exchanged for any other
benefit.

     

    9.    Restrictive
Covenants.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    9.1.    Non-Competition.  During the Non-Competition Period,
Executive shall not, without the prior written consent of an authorized officer
of Vishay, directly or indirectly, own, manage, operate, join, control,
participate in, invest in or otherwise be connected or associated with, in any
manner, including as an officer, director, employee, independent contractor,
subcontractor, stockholder, member, manager, partner, principal, consultant,
advisor, agent, proprietor, trustee or investor, any Competing Business;
provided, however, that nothing in this Agreement shall prevent Executive from
(A) owning five percent (5%) or less of the stock or other securities of a
publicly held corporation, so long as Executive does not in fact have the power
to control, or direct the management of, and is not otherwise associated with,
such corporation, or (B) performing services for an investment bank, investment
advisor or investment fund that may, directly or indirectly, own, manage,
operate, join, control, participate in, invest in or otherwise be connected or
associated with, in any manner, any Competing Business, provided that Executive
shall not, directly or indirectly, have any responsibility whatsoever for,
provide any services whatsoever to, or otherwise be connected or associated with
such Competing Business. 
Notwithstanding the foregoing, if a company has separate divisions or
subsidiaries, some of which conduct a Competing Business and some of which
conduct other businesses which are not Competing Businesses, then the
restrictions imposed hereunder with respect to Competing Businesses shall apply
only to the divisions or subsidiaries of such company that conduct the Competing
Businesses, provided that (A) Executive shall not, directly or indirectly, have
any responsibility whatsoever for, provide any services whatsoever to, or
otherwise be connected or associated with any Competing Business of the same
company, and (B) Executive obtains the prior written consent of Vishay, which consent shall not be unreasonably
with held.

     

    9.2.    Non-Solicitation.  During the Non-Solicitation Period,
Executive shall not, directly or indirectly:

     

    (a)    solicit
any customer of Vishay or any of its subsidiaries or affiliates to which
Executive provided (or participated in a proposal to provide) services during
the Term;

     

    (b)    hire,
solicit for employment, or recruit any person who at the relevant time is or,
within the preceding three months, was, an officer, director, employee,
independent contractor, subcontractor, manager, partner, principal, consultant,
or agent of Vishay or any of its subsidiaries or affiliates, or induce or
encourage any of the foregoing to terminate their employment, contractual or
other relationship (as appropriate) with Vishay or any of its subsidiaries or
affiliates, or attempt to do any of the foregoing either on Executive’s own
behalf or for the benefit of any third person or entity;

     

    (c)    persuade
or seek to persuade any customer of Vishay or any of its subsidiaries or
affiliates to cease to do business or to reduce the amount of business which the
customer has customarily done or contemplates doing with Vishay or such
subsidiary or affiliate, whether or not the relationship with such customer was
originally established in whole or in part through Executive’s efforts;
or

     

    (d)    interfere
in any manner in the relationship of Vishay or any of its subsidiaries or
affiliates with any of their respective customers, suppliers, or independent
contractors, whether or not the relationship with such customer, supplier or
independent contractor was originally established in whole or in part through
Executive’s efforts.

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     

    9.3.    Confidential
Information.  Executive agrees
that he shall not, directly or indirectly, use, make available, sell, disclose
or otherwise communicate to any person, other than in the course of Executive’s
assigned duties hereunder and for the benefit of Vishay and/or its subsidiaries
or affiliates, either during the Term or at any time thereafter, any nonpublic,
proprietary or confidential information, knowledge or data in any form or media,
whether documentary, written, oral or computer generated, relating to Vishay,
any of its subsidiaries, affiliated companies or businesses, which shall have
been obtained by Executive during Executive’s employment by Vishay or during the
Term.  The foregoing shall not apply
to information that (i) was known to the public prior to its disclosure to
Executive; (ii) becomes known to the public subsequent to disclosure to
Executive through no wrongful act of Executive or any representative of
Executive; or (iii) Executive is required to disclose by applicable law,
regulation or legal process (provided that Executive provides Vishay with prior
notice of the contemplated disclosure and reasonably cooperates with Vishay at
its expense in seeking a protective order or other appropriate protection of
such information).  Notwithstanding
clauses (i) and (ii) of the preceding sentence, Executive’s obligation to
maintain such disclosed information in confidence shall not terminate where only
portions of the information are in the public domain.

     

    9.4.    Non-Disparagement.  Each of Executive and Vishay (for purposes
hereof, Vishay shall mean only the executive officers and directors thereof and
not any other employees) agrees not to make any public statements that disparage
the other party or, in the case of Vishay, its respective affiliates, employees,
officers, directors, products or services.  Notwithstanding the foregoing, statements
made in the course of sworn testimony in administrative, judicial or arbitral
proceedings (including, without limitation, depositions in connection with such
proceedings) shall not be subject to this Section 9.4.

     

    9.5.    Acknowledgments Respecting
Restrictive Covenants.

     

    (a)    Executive
has carefully read and considered the provisions of this Section 9 and, having
done so, agrees that:

     

    (i)    the
restrictive covenants contained in this Section 9, including, without
limitation, the scope and time period of such restrictions, are reasonable, fair
and equitable in light of Executive’s duties and responsibilities under this
Agreement and the benefits to be provided to him under this Agreement;
and

     

    (ii)    such
restrictive covenants are reasonably necessary to protect the legitimate
business interests of Vishay.

     

    (b)    The
parties acknowledge that it is impossible to measure in money the damages that
will accrue to one party in the event that the other party breaches any of the
restrictive covenants contained in this Section 9 and that any such damages, in
any event, would be inadequate and insufficient.  Therefore, if one party breaches any
restrictive covenant contained in this Section 9, the non-breaching party shall
be entitled to an injunction restraining

     

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

    the
breaching party from violating such restrictive covenant; provided, however,
that a party must provide the other party with not less than thirty (30) days written notice
prior to instituting an action or proceeding to enforce any restrictive covenant
contained in this Section 9. If the non- breaching
party shall institute any action or proceeding to enforce a restrictive covenant
contained in this Section 9, the breaching party hereby waives, and agrees not
to assert in any such action or proceeding, the claim or defense that the
non-breaching party has an adequate remedy at law.

     

    (c)    In the
event of a breach of any of the restrictive covenants contained in this Section
9, the parties agree that the non-breaching party, in addition to any injunctive
relief as described in Section 9.5(b), shall be entitled to
any other appropriate legal or equitable remedy.

     

    (d)    If any of
the restrictive covenants contained in this Section 9 are deemed by a court of
competent jurisdiction to be unenforceable by reason of their extent, duration
or geographical scope or otherwise, the parties contemplate that the court shall
revise such extent, duration, geographical scope or other provision but only to
the extent required in order to render such restrictions enforceable, and
enforce any such restriction in its revised form for all purposes in the manner
contemplated hereby.

     

    9.6.    Consideration.  Executive hereby acknowledges that
Vishay’s obligation to make payments to Executive pursuant to Section 4 and
Section 7 of this Agreement is in consideration of Executive’s agreement to be
bound by and comply with the provisions of this Section 9.

     

    10.    Miscellaneous.

     

    10.1.    Key Man
Insurance.  Executive
recognizes and acknowledges that Vishay. or its
affiliates may seek and purchase one or more policies providing key man life
insurance with respect to Executive, the proceeds of which would be payable to
Vishay or such affiliate.  Executive
hereby consents to Vishay or its affiliates seeking and purchasing such
insurance and will provide such information, undergo such medical examinations
(at Vishay’s expense), execute such documents and otherwise take any and all
actions necessary or desirable in order for Vishay or its affiliates to seek,
purchase and maintain in full force and effect such policy or policies.  Vishay shall ensure that under no
circumstances shall the results of any such medical examination shall be
disclosed to any person or entity, including Vishay, other than to the Executive
and to the applicable insurance company for purposes of providing such
insurance, which insurance company shall hold such results in the strictest
confidence.

     

    10.2.    Notices.  Any notice, consent, request or other
communication made or given in accordance with this Agreement, including any
Notice of Termination, shall be in writing and shall be sent by (i) personal
delivery to the party entitled thereto, (ii) facsimile with confirmation of
receipt, (iii) registered or certified mail, return receipt requested, or (iv)
Federal Express or similar courier service.  The notice, consent request or other
communication shall be deemed to have been received upon personal delivery, upon
confirmation of receipt of facsimile transmission or courier service, or, if
mailed, three (3) days after mailing. 
Any notice, consent, request or other communication made or given in accordance
with the Agreement shall be made to those listed below at their following
respective addresses or at such other address as each may specify by notice to
the other:

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              To
      Vishay:

            

    

    

    
      	
               
      

            	
              Vishay
      Intertechnology, Inc.

            

    

    
      	
               
      

            	
              63
      Lancaster Avenue

            

    

    
      	
               
      

            	
              Malvern,
      PA 19355-2143

            

    

    Attention: Chief Financial Officer

    
      	
               
      

            	 

    

     

    
      	
               
      

            	
              To
      Executive:

            

    

     

    
      	
               
      

            	
              to the address on file with
  Vishay.

            

    

     

    10.3.    No Mitigation.  In no event shall Executive be obligated
to seek other employment or take other action by way of mitigation of the
amounts payable to Executive under any of the provisions of this Agreement, and
such amounts shall not be reduced whether or not Executive obtains other
employment.

     

    10.4.    Successors.

     

    (a)    This
Agreement is personal to Executive and, without the prior written consent of
Vishay, shall not be assignable by Executive otherwise than by will or the laws
of descent and distribution.  This
Agreement shall inure to the benefit of and be enforceable by Executive’s heirs
and legal representatives.

     

    (b)    This
Agreement shall inure to the benefit of and be binding upon Vishay and its
successors and assigns.

     

    (c)    Vishay
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the assets of Vishay
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that Vishay would have been required to perform if no such
succession had taken place.  As used
in this Agreement, “Vishay” shall mean both Vishay as defined above and any such
successor that assumes and agrees to perform this Agreement, by operation of law
or otherwise.

     

    10.5.    Complete Understanding;
Amendment; Waiver.  This
Agreement constitutes the complete understanding between the parties with
respect to the employment of Executive and supersedes all other prior agreements
and understandings, both written and oral, between the  parties
with respect to the subject matter hereof, and no statement, representation,
warranty or covenant has been made by either party with respect thereto except
as expressly set forth herein.  This
Agreement shall not be altered, modified, amended or terminated except by a
written instrument signed by each of the parties hereto.  Any waiver of any term or provision
hereof, or of the application of any such term or provision to any
circumstances, shall be in writing signed by the party charged with giving such
waiver.  Waiver by either party hereto
of any breach hereunder by the other party shall not operate as a waiver of any
other breach, whether similar to

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

     

    or
different from the breach waived.  No
delay on the part of Vishay or Executive in the exercise of any of their
respective rights or remedies shall operate as a waiver thereof, and no single
or partial exercise by Vishay or Executive of any such right or remedy shall
preclude other or further exercise thereof.

     

    10.6.    Withholding
Taxes.  Vishay may withhold
from all payments due to Executive (or his beneficiary or estate) under this
Agreement all taxes which, by applicable federal, state, local or other law,
Vishay is required to withhold therefrom.

     

    10.7.    Severability.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.  If any provision of this Agreement shall
be held invalid or unenforceable in part, the remaining portion of such
provision, together with all other provisions of this Agreement, shall remain
valid and enforceable and continue in full force and effect to the fullest
extent consistent with law.

     

    10.8.    Governing Law.  This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of law.

     

    10.9.    Titles and
Captions.  All Section titles
or captions in this Agreement are for convenience only and in no way define,
limit, extend or describe the scope or intent of any provision
hereof.

     

    10.10.   Counterparts.  This Agreement may be signed in one or
more counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute but one and the same instrument.  The
exchange of copies of this Agreement and of signature pages by facsimile
transmission or electronic mail with scanned attachments shall constitute
effective execution and delivery of this Agreement as to the parties and may be
used in lieu of the original Agreement for all purposes. Signatures of the
parties transmitted by facsimile or electronic mail with scanned attachments
shall be deemed to be their original signatures for all purposes.

     

    [signature page
follows]

     

     

    
 

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
 

    IN
WITNESS WHEREOF, Executive has executed this Agreement and, pursuant to the
authorization of the Compensation Committee of the Board of Directors, Vishay
has caused this Agreement to be executed in its name and on its behalf, all on
the date above written.

     

                    VISHAY
INTERTECHNOLOGY, INC.

    

    

                    By: /s/ Dr. Gerald Paul

                    Name: Dr. Gerald
Paul

                    Title: Chief Executive Officer

    

    

                    EXECUTIVE:

    

    

                    /s/ Dr. Felix
Zandman

                    Dr. Felix
Zandman

     

     

     

     

    15

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    ATTACHMENT
A

     

    Dr.
Zandman Supplemental Executive Retirement Plan

     

    1.    Payment of Retirement
Benefit

     

    1.1    Payment of Retirement
Benefit.  Vishay shall pay a pension (the “Retirement Benefit”)
to Dr. Felix Zandman (the “Executive”), as set forth herein, consisting of
monthly annuity payments equal to one-twelfth of the lesser of (i) 50% of
Executive’s average base salary and the average annual bonus to which Executive
was entitled (without regard to whether Executive waived payment of all or part
of such bonus) for the five calendar years preceding the Executive’s termination
of employment and (ii) $1,000,000.  The terms and provisions of the
Retirement Benefit, as set forth herein, shall be referred to as the “Dr.
Zandman Supplemental Executive Retirement Plan” or the “Plan.”

     

    1.2    Commencement of
Payments.  Vishay shall commence payment of the Retirement
Benefit as of the first month next following Executive’s termination of
employment from Vishay for any reason (the “Benefit Commencement Date”),
provided that if the termination giving rise to the payments described in
Section 1.1 is not a “Separation from Service” within the meaning of Treas. Reg.
§ 1.409A-1(h)(1) (or any successor provision), then the amounts otherwise
payable pursuant to the Plan will instead be deferred without interest and will
not be paid until Executive experiences a Separation from Service.  In
addition, to the extent compliance with the requirements of Treas. Reg. §
1.409A-3(i)(2) (or any successor provision) is necessary to avoid the
application of an additional tax under Section 409A of the Code to payments due
to Executive upon or following his Separation from Service, then notwithstanding
any other provision of this Agreement (or any otherwise applicable plan, policy,
agreement or arrangement), any such payments that are otherwise due within six
months following Executive’s Separation from Service (taking into account the
preceding sentence of this paragraph) will be deferred without interest and paid
to Executive in a lump sum immediately following that six month
period.  If Executive dies during the postponement period prior to
payment of the postponed amount, the amounts withheld on account of Section 409A
of the Code shall be paid to the Executive’s estate within 10 days after the
date of the Employee’s death.  This Section 1.2 should not be
construed to prevent the application of Treas. Reg. §§ 1.409A-1(b)(4) or
-1(b)(9)(iii) (or any successor provisions) to any amount payable to
Executive.  For purposes of the application of Treas. Reg. §
1.409A-1(b)(4) (or any successor provision) to this Agreement, each payment in a
series of payments will be deemed a separate payment.

     

    1.3    Normal Form of
Payment.  The Retirement Benefit shall be paid as an annuity
for the life of Executive, unless Executive elects that payment be made as a
joint and 100% survivor annuity or a joint and 50% survivor annuity (each an
“Optional Form”), as described below.

     

    1.4    Joint and Survivor
Annuity.  Under an Optional Form, payments would be made for
Executive’s life and, after Executive’s death, for the life of Executive’s
surviving beneficiary.  The surviving beneficiary would receive a
benefit equal to 100% or 50% of the monthly benefit paid to Executive and the
monthly payments to Executive would be actuarially reduced below the amount set
forth in Section 1.1 above. The actuarial reduction will be in the 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    amount that Vishay determines, based on the advice of its
actuarial consultant, is necessary to provide a monthly survivorship pension to
Executive’s beneficiary for his or her lifetime.  Notwithstanding the
foregoing, any Optional Form shall be actuarially equivalent to the Retirement
Benefit described in Section 1.1, applying reasonably actuarial methods and
assumptions.

     

    1.5    Election of Optional
Form.  Executive’s election of an Optional Form must be made
before the Benefit Commencement Date and cannot be changed after the Benefit
Commencement Date.  If Executive’s beneficiary dies during Executive’s
life, but after the Benefit Commencement Date, Executive will continue to
receive the reduced benefit for the remainder of his life.

     

    1.6    Revocation of
Election.  Executive can revoke his election of an Optional
Form (without the consent of his spouse or any other person) at any time prior
to the Benefit Commencement Date, but not thereafter.  If Executive
elects an Optional Form and Executive dies before the Benefit Commencement Date,
Executive’s election automatically will be revoked and the Retirement Benefit
will then be payable as an annuity for Executive’s life.

     

    1.7    Beneficiaries.  If
Executive elects an Optional Form he shall designate, or change his designation
of, a beneficiary by written notice to the Compensation Committee of the Board
of Directors of Vishay (the “Committee”).

     

    1.8    Withholding for
Taxes.  To the extent required by law, the Company shall
withhold from payments made hereunder any federal, state, local or other taxes
required to be withheld.

     

    2.    Plan
Administration

     

    2.1    Committee.  The
Committee shall administer the Plan and shall have the power and authority in
its sole discretion to interpret the Plan, and to make all determinations in the
administration of the Plan.  The Committee may employ such counsel,
accountants, actuaries, and other agents as it shall deem
advisable.  The Company shall pay the expenses incurred by the
Committee in the administration of the Plan, including compensation of any such
agents.

     

    2.2    Committee Authority
Regarding Payments. If the Committee has any doubt as to the proper
beneficiary to receive payments hereunder, the Committee shall have the right to
withhold such payments until the matter is finally adjudicated.  Any
payment made by the Committee, in good faith and in accordance with this Plan,
shall fully discharge the Company from all further obligations with respect to
that payment.

     

    2.3    Indemnification. The
Company shall indemnify and save harmless each member of the Committee, and each
employee, director or officer of the Company or of any of its subsidiaries, from
and against any and all loss, liability, claim, damage, cost and expense which
may arise by reason of, or be based upon, any matter connected with or related
to the administration of the Plan (including, but not limited to, any and all
expenses whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or in settlement of any such
claim whatsoever), unless such person shall have

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    acted in
bad faith or been guilty of willful misconduct in respect of his duties, actions
or omissions in respect of the Plan.

     

    3.    Claims
Procedure

     

    3.1    Administrator of Claims
Procedure.  The Committee shall administer the claims procedure
under the Plan.

     

    The
business address and telephone number of the Committee is:

     

    Compensation Committee

    Vishay
Intertechnology, Inc.

    63
Lancaster Avenue

    Malvern,
PA 19355-2143

    
      	
               
      

            	
                    (610)
      644-1300

            

    

     

    3.2    Claims.  Payment
of the Retirement Benefit will begin automatically upon Executive’s termination
of employment.  Nevertheless, if Executive or his beneficiary
believes that he or she is entitled to additional benefits under this Plan,
Claimant shall mail or deliver to the Committee a written request for such
benefits.  The Committee shall establish a claims review procedure,
including a right of review of a denied claim, that complies with the applicable
requirements of law and shall adjudicate any claim in accordance with such
claims procedures.

     

    3.3    Resolution of
Disputes.   Any dispute arising out of this Plan that
remains notwithstanding exhaustion of the Plan’s claims procedure shall, if
agreed to by Executive or his beneficiary and the Committee, be determined by
arbitration under the rules of the American Arbitration Association then in
effect (in which case both parties shall be bound by the arbitration award) or
by litigation.  The venue for any such arbitration or litigation shall
be Philadelphia, Pennsylvania.

     

    4.    General

     

    4.1    Source of
Payment.  All benefits under the Plan shall be paid by the
Company out of its general assets, and any rights of Executive or his
beneficiary hereunder shall be mere unsecured contractual
rights.  Vishay and Executive intend that the Plan shall be unfunded
for tax purposes and for purposes of Title I of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and no trust, security, escrow, or
similar account shall be established in connection with the Plan.  The
Company may, however, in its discretion, establish a “rabbi trust” to assist in
meeting its obligation to pay benefits under the Plan, and amounts paid from any
such rabbi trust shall discharge the obligations of the Company hereunder to the
extent of the payments.  Any trust so created shall be consistent with
the terms of the model trust described in Revenue Procedure
92-64.  Executive or his beneficiary shall not have a preferred
claim on or beneficial ownership interest in the assets of such rabbi
trust.

     

    4.2    Nontransferable.  Except
as provided by the laws of descent and distribution or provided by will or
insofar as this provision may be contrary to applicable law, no 

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    sale, transfer, alienation, assignment, pledge, collateralization,
or attachment of any benefits under this Plan shall be valid or recognized by
the Committee.

     

    4.3    Governing
Law.  This Plan shall be governed by the laws of Delaware
without regard to the principles of conflict of laws except where such laws are
superseded by ERISA, in which case ERISA shall control.

     

    4.4    Severability.  In
case any provision of this Plan shall be held illegal or invalid for any reason,
such illegality or invalidity shall not affect the remaining parts of this Plan,
and this Plan shall be construed and enforced as if such illegal and invalid
provisions had never been inserted herein.

     

    4.5    Titles.  The
titles to articles and headings of sections of this Plan are for convenience of
reference and in case of any conflict the text of the Plan, rather than such
titles and headings, shall control.  Words in the singular shall be
read and construed as though used in the plural in all cases where they would so
apply.

     

    
 

     

     

     

     

    4

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