Note 12 – Stock-Based Compensation

The Company has various stockholder-approved programs which allow for the grant of share-based compensation to officers, employees, and non-employee directors.

The amount of compensation cost related to stock-based payment transactions is measured based on the grant-date fair value of the equity instruments issued. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The Company determines compensation cost for restricted stock units ("RSUs"), phantom stock units, and restricted stock based on the grant-date fair value of the underlying common stock adjusted for expected dividends paid over the required vesting period for non-participating awards. Compensation cost is recognized over the period that an officer, employee, or non-employee director provides service in exchange for the award.

The following table summarizes share-based compensation expense recognized:

	Years ended December 31,
	2014		2013		2012

Restricted stock units	$	2,261	$	510	$	3,378
Stock options		-		18		73
Phantom stock units		131		108		93
Total	$	2,392	$	636	$	3,544

The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative adjustments in the period that the expectation changes. Stock-based compensation for the year ended December 31, 2013, as presented in the table above, includes the material reversal of stock-based compensation expense recognized for the performance-based RSUs scheduled to vest on January 1, 2014 recorded in the second fiscal quarter of 2013. $1,778 of these reversed costs had been originally reported as a separate line item upon cessation of employment of certain former executives in 2011, and accordingly, this adjustment is also reported as a separate line item in the accompanying consolidated statements of operations. A portion of the stock-based compensation expense related to certain current executives that was reversed in the second fiscal quarter of 2013 was recognized in the fourth fiscal quarter of 2013 due to certain amendments to the performance-based RSUs granted to certain current executives in 2011 approved by the Compensation Committee of the Board of Director's in the fourth fiscal quarter of 2013. Pursuant to their original terms, the performance-based RSUs would have vested on January 1, 2014 only if all of the associated performance criteria were met for the three-year period ending December 31, 2013. Pursuant to the amended terms, 75% of the performance-based RSUs of each of the certain current executives vested effective December 5, 2013 in light of the Compensation Committee of the Board of Director's assessment that the performance criteria would be achieved in substantial part by December 31, 2013.

The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at December 31, 2014 (amortization periods in years):

	Unrecognized Compensation Cost		Weighted Average Remaining Amortization Periods

Stock options	$	-		0.0
Restricted stock units		10,118		0.9
Phantom stock units		-		0.0
Total	$	10,118

Unrecognized compensation cost presented in the table above includes $6,485 of unrecognized compensation cost for performance-based RSUs that are not currently expected to vest and for which no compensation cost is currently being recognized.

Note 12 – Stock-Based Compensation (continued)

2007 Stock Incentive Program

The Company's 2007 Stock Incentive Program (the "2007 Program"), as amended and restated, was approved by Vishay's stockholders at Vishay's Annual Meeting of Stockholders on May 20, 2014. The 2007 Program permits the grant of up to 6,500,000 shares of restricted stock, unrestricted stock, RSUs, stock options, and phantom stock units, to officers, employees, and non-employee directors of the Company. Such instruments are available for grant until May 20, 2024.

At December 31, 2014, the Company has reserved 3,693,000 shares of common stock for future grants of equity awards pursuant to the 2007 Program. If any outstanding awards are forfeited by the holder or cancelled by the Company, the underlying shares would be available for regrant to others.

Restricted Stock Units

Each RSU entitles the recipient to receive a share of common stock when the RSU vests.

RSU activity for the years ended December 31, 2014, 2013, and 2012 is presented below (number of RSUs in thousands):

	Years ended December 31,
	2014					2013					2012
	Number of RSUs			Weighted Average Grant-date Fair Value		Number of RSUs			Weighted Average Grant-date Fair Value		Number of RSUs			Weighted Average Grant-date Fair Value

Outstanding:
Beginning of year		1,059		$	13.40		1,316		$	12.53		891		$	12.58
Granted		336			13.48		374			12.76		437			12.31
Vested*		(146	)		15.87		(598	)		10.92		(12	)		8.29
Cancelled or forfeited		(102	)		17.45		(33	)		16.54		-			-
End of year		1,147		$	12.75		1,059		$	13.40		1,316		$	12.53

Expected to vest		649					570					1,040

* The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements.

The number of performance-based RSUs scheduled to vest on January 1, 2015 is fixed based on the full achievement of the defined target performance criteria. The number of performance-based RSUs scheduled to vest on January 1, 2016 and January 1, 2017 increases ratably based on the achievement of defined performance criteria between the established target and maximum levels. RSUs with performance-based vesting criteria are expected to vest as follows (number of RSUs in thousands):

Vesting Date	Expected to Vest		Not Expected to Vest		Total
January 1, 2015**		-		276		276
January 1, 2016		-		222		222
January 1, 2017		192		-		192

** The performance vesting criteria for the performance-based RSUs with a vesting date of January 1, 2015 were not achieved.

In the event of (i) the termination of the executive's employment by the Company without cause, by the executive for "good reason," or as a result of death or disability, the executive's outstanding RSUs shall immediately vest and the outstanding performance-based RSUs shall vest on their normal vesting date to the extent applicable performance criteria are realized; and (ii) a change of control of Vishay, all of such executive's outstanding RSUs and performance-based RSUs shall immediately vest. In the event of voluntary termination by the executive (without "good reason") or termination for cause, the executive's outstanding RSUs and performance-based RSUs will be forfeited.

Note 12 – Stock-Based Compensation (continued)

Phantom Stock Units

The 2007 Program authorizes the grant of phantom stock units to the extent provided for in the Company's employment agreements with certain executives. Each phantom stock unit entitles the recipient to receive a share of common stock at the individual's termination of employment or any other future date specified in the applicable employment agreement. Phantom stock units participate in dividend distribution on the same basis as the Company's common stock and Class B common stock. Dividend equivalents are issued in the form of additional units of phantom stock. The phantom stock units are fully vested at all times.

The following table summarizes the Company's phantom stock units activity for the years ended December 31, 2014, 2013, and 2012 (number of phantom stock units in thousands):

	Years ended December 31,
	2014				2013				2012
	Number of Phantom Stock Units		Grant- date Fair Value per Unit		Number of Phantom Stock Units		Grant- date Fair Value per Unit		Number of Phantom Stock Units		Grant- date Fair Value per Unit

Outstanding:
Beginning of year		107				97				87
Granted		10	$	13.12		10	$	10.75		10	$	9.33
Dividend equivalents issued		2				-				-
Redeemed for common stock		-				-				-
End of year		119				107				97

Note 12 – Stock-Based Compensation (continued)

Stock Options

In addition to stock options outstanding pursuant to the 2007 Program, during the periods presented, the Company had stock options outstanding under previous stockholder-approved stock option programs.

Under the 1998 Stock Option Program, certain executive officers and key employees were granted options. On March 16, 2008, the stockholder approval for the 1998 Stock Option Program expired. While no additional options may be granted pursuant to this plan, at December 31, 2014, 95,000 options issued under the 1998 Program remain outstanding and may be exercised in future periods.

The following table summarizes the Company's stock option activity (number of options in thousands):

	Years ended December 31,
	2014					2013				2012
	Number of Options			Weighted Average Exercise Price		Number of Options		Weighted Average Exercise Price		Number of Options			Weighted Average Exercise Price

Outstanding:
Beginning of year		109		$	15.24		109	$	15.24		384		$	15.40
Granted		-			-		-		-		-			-
Exercised		(4	)		11.62		-		-		(22	)		7.89
Cancelled or forfeited		-			-		-		-		(253	)		16.12
End of year		105		$	15.38		109	$	15.24		109		$	15.24

Vested and expected to vest		105					109				109

Exercisable:
End of year		105					109				79

The following table summarizes information concerning stock options outstanding and exercisable at December 31, 2014 (number of options in thousands, contractual life in years):

Options Outstanding & Exercisable
Exercise Price		Number of Options		Remaining Contractual Life

$	12.90		28		2.16
	16.29		77		2.39
$	15.38		105		2.33

The weighted-average remaining contractual life of all exercisable options is 2.33 years.

Note 12 – Stock-Based Compensation (continued)

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. There were no options granted in 2014, 2013, or 2012.

The pretax aggregate intrinsic value (the difference between the closing stock price on the last trading day of 2014 of $14.15 per share and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2014 is $35. This amount changes based on changes in the market value of the Company's common stock. During the years ended December 31, 2014 and 2012, 4,337 options and 22,095 options, respectively, were exercised. No options were exercised during the year ended December 31, 2013. The total intrinsic value of options exercised during the years ended December 31, 2014 and 2012 was $18 and $110, respectively.

The following table summarizes information concerning unvested stock options (number of options in thousands):

	Years ended December 31,
	2014				2013					2012
	Number of Options		Weighted Average Grant-date Fair Value		Number of Options			Weighted Average Grant-date Fair Value		Number of Options			Weighted Average Grant-date Fair Value

Unvested:
Beginning of year		-	$	-		30		$	10.14		61		$	9.96
Granted		-		-		-			-		-			-
Vested		-		-		(30	)		10.14		(31	)		9.79
End of year		-	$	-		-		$	-		30		$	10.14