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,
	2016		2015		2014

Restricted stock units	$	6,263	$	3,705	$	2,261
Phantom stock units		117		141		131
Stock options		-		-		-
Total	$	6,380	$	3,846	$	2,392

The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative adjustments in the period that the expectation changes.

The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at December 31, 2016 (amortization periods in years):

	Unrecognized Compensation Cost		Weighted Average Remaining Amortization Periods

Restricted stock units	$	2,413		0.7
Phantom stock units		-		0.0
Stock options		-		0.0
Total	$	2,413

The Company currently expects all performance-based RSUs to vest and all of the associated unrecognized compensation cost for performance-based RSUs presented in the table above to be 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, 2016, the Company has reserved 3,474,000 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, 2016, 2015, and 2014 is presented below (number of RSUs in thousands):

	Years ended December 31,
	2016					2015					2014
	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		1,028		$	13.24		1,147		$	12.75		1,059		$	13.40
Granted		353			11.35		349			13.60		336			13.48
Vested*		(155	)		12.27		(182	)		11.41		(146	)		15.87
Cancelled or forfeited		(222	)		13.19		(286	)		12.89		(102	)		17.45
End of year		1,004		$	12.74		1,028		$	13.24		1,147		$	12.75

Expected to vest		1,004					806					649

* 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 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, 2017**		192		-		192
January 1, 2018		202		-		202
January 1, 2019		213		-		213

** The performance vesting criteria for the performance-based RSUs with a vesting date of January 1, 2017 were achieved.

In the event of (i) any termination (other than for cause) after attaining retirement age (as defined in the respective executive's employment arrangement), 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 prior to attaining retirement age 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, 2016, 2015, and 2014 (number of phantom stock units in thousands):

	Years ended December 31,
	2016				2015				2014
	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		132				119				107
Granted		10	$	11.71		10	$	14.09		10	$	13.12
Dividend equivalents issued		3				3				2
Redeemed for common stock		-				-				-
End of year		145				132				119

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, 2016, 70,000 options issued under the 1998 Program remain outstanding and may be exercised in future periods.

As of December 31, 2016, 77,000 options were outstanding. As of December 31, 2015 and 2014, 105,000 options were outstanding.

Since December 31, 2013, all outstanding options have vested and are exercisable. As of December 31, 2016, the weighted-average remaining contractual life of all exercisable options is 0.39 years and the exercise price of all exercisable options is $16.29.

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 2016, 2015, or 2014.

The pretax aggregate intrinsic value (the difference between the closing stock price on the last trading day of 2016 of $16.20 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, 2016 was zero because all outstanding options have exercise prices in excess of market value. This amount changes based on changes in the market value of the Company's common stock. During the years ended December 31, 2016 and 2014, 27,619 and 4,337 options were exercised, respectively. The weighted average exercise prices for the options exercised in 2016 and 2014 were $12.90 and $11.62, respectively. The total intrinsic value of options exercised during the years ended December 31, 2016 and 2014 was $85 and $18, respectively. No options were exercised during the year ended December 31, 2015.