Note 4 – Restructuring and Related Activities

The Company places a strong emphasis on controlling its costs and combats general price inflation by continuously improving its efficiency and operating performance. When the ongoing cost containment activities are not adequate, the Company takes actions to maintain its cost competitiveness.

The Company incurred significant restructuring costs in its past to reduce its cost structure. Historically, the Company's primary cost reduction technique was through the transfer of production from high-labor-cost countries to lower-labor-cost countries. Since 2013, the Company's cost reduction programs have primarily focused on reducing fixed costs, including selling, general, and administrative expenses.

In 2013, the Company announced various cost reduction programs. These programs were substantially implemented by the end of the first fiscal quarter of 2016, with some additional costs incurred in the remainder of 2016. Many of the severance costs were recognized ratably over the required stay periods. In November 2016, the Company announced an extension of one of these programs.

In 2015, the Company announced additional global cost reduction programs. These programs include a facility closure in the Netherlands. The cash costs of these programs, primarily severance, are expected to aggregate to approximately $30,000. Complete implementation of these programs is expected to occur before the end of 2017.

The following table summarizes restructuring and related expenses which were recognized during the years ended December 31, 2016, 2015, and 2014 and reported on a separate line in the accompanying consolidated statements of operations:

	Years ended December 31,
	2016			2015		2014
MOSFETs Enhanced Competitiveness Program	$	9,744		$	5,367	$	6,025
Voluntary Separation / Retirement Program		-			95		12,792
Modules Production Transfer		(463	)		-		2,080
Global Cost Reduction Programs		9,918			13,753		-
Total	$	19,199		$	19,215	$	20,897

MOSFETs Enhanced Competitiveness Program

Over a period of approximately 2 years and in a period of discrete steps, the manufacture of wafers for a substantial share of products was transferred into a more cost-efficient fab. As a consequence, certain other manufacturing previously occurring in-house was transferred to third-party foundries. This transfer of production was substantially completed by the end of the first fiscal quarter of 2016.

Employees generally were required to remain with the Company during the production transfer period. Accordingly, the Company accrued these severance costs ratably over the respective employees' remaining service periods. The Company has incurred and may continue to incur other exit costs associated with the production transfer, including certain contract termination costs.

As a result of a review of recent financial results and outlook for the Company's MOSFETs segment following the recent completion of production transfers, the Company has determined to implement further cost reductions for the MOSFETs segment.

On November 7, 2016, the Company announced an extension of the MOSFETs Enhanced Competitiveness Program. The revised program includes various cost reduction initiatives, primarily the transfer of all remaining manufacturing operations at its Santa Clara, California facility to other Vishay facilities or third-party subcontractors. The production transfers will be completed in steps by the end of 2017. The Company expects to incur cash charges of approximately $4,000 to $8,000, primarily related to severance, to implement these additional steps. The total cash charges for the MOSFETs Enhanced Competitiveness Program are expected to be $23,000 to $27,000. The Company expects to maintain its R&D and management presence in the Silicon Valley area, even after the cessation of manufacturing operations there.

Note 4 – Restructuring and Related Activities (continued)

The following table summarizes the activity to date related to this program:

Expense recorded in 2013	$	2,328
Cash paid		(267	)
Balance at December 31, 2013	$	2,061
Expense recorded in 2014		6,025
Cash paid		(856	)
Balance at December 31, 2014	$	7,230
Expense recorded in 2015		5,367
Cash paid		(426	)
Foreign currency translation		1
Balance at December 31, 2015	$	12,172
Expense recorded in 2016		9,744
Cash paid		(15,686	)
Foreign currency translation		2
Balance at December 31, 2016	$	6,232

Severance benefits are generally paid in a lump sum at cessation of employment. Other exit costs of $5,763 are included in the expenses incurred in 2016 in the table above. The entire amount of the liability is considered current and is included in other accrued expenses in the accompanying consolidated balance sheets.

Voluntary Separation / Retirement Program

The voluntary separation / early retirement program was offered to employees worldwide who were eligible because they met job classification, age, and years-of-service criteria as of October 31, 2013. The program benefits varied by country and job classification, but generally included a cash loyalty bonus based on years of service. All employees eligible for the program have left the Company.

These employees generally were not aligned with any particular segment. The effective separation / retirement date for most employees who accepted the offer was June 30, 2014 or earlier, with a few exceptions to allow for a transition period.

The following table summarizes the activity to date related to this program:

Expense recorded in 2013	$	486
Cash paid		(98	)
Foreign currency translation		3
Balance at December 31, 2013	$	391
Expense recorded in 2014		12,792
Cash paid		(8,054	)
Foreign currency translation		(455	)
Balance at December 31, 2014	$	4,674
Expense recorded in 2015		95
Cash paid		(3,166	)
Foreign currency translation		(258	)
Balance at December 31, 2015	$	1,345
Cash paid		(816	)
Foreign currency translation		-
Balance at December 31, 2016	$	529

The payment terms vary by country, but generally were paid in a lump sum at cessation of employment. Certain participants are being paid in installments. The entire amount of the liability is considered current and is included in other accrued expenses in the accompanying consolidated balance sheets.

Note 4 – Restructuring and Related Activities (continued)

Modules Production Transfer

In an effort to reduce costs and streamline production of its module products within its Diodes segment, the Company committed to two smaller cost reduction programs related to the transferring of production of certain of its products.

The Company recorded restructuring and severance costs of $2,080 for the year ended December 31, 2014 related to these production transfer programs. Substantially all amounts related to these programs have been paid as of December 31, 2016.

Global Cost Reduction Programs

The global cost reduction programs announced in 2015 include a plan to reduce selling, general, and administrative costs company-wide, and targeted streamlining and consolidation of production for certain product lines within its Capacitors and Resistors & Inductors segments.

The following table summarizes the activity to date related to this program:

Expense recorded in 2015	$	13,753
Cash paid		(986	)
Foreign currency translation		(150	)
Balance at December 31, 2015	$	12,617
Expense recorded in 2016		9,918
Cash paid		(16,237	)
Foreign currency translation		(34	)
Balance at December 31, 2016	$	6,264

The following table summarizes the expense recognized by segment related to this program:

	Years ended December 31,
	2016		2015
Diodes	$	788	$	133
Optoelectronic Components		936		215
Resistors & Inductors		5,173		5,972
Capacitors		687		5,209
Unallocated Selling, General, and Administrative Expenses		2,334		2,224
Total	$	9,918	$	13,753

Severance benefits are generally paid in a lump sum at cessation of employment. The current portion of the liability is $5,890 and is included in other accrued expenses in the accompanying consolidated balance sheet. The non-current portion of the liability is included in other liabilities in the accompanying consolidated balance sheet.