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,
	2017		2016		2015

Restricted stock units	$	4,231	$	6,263	$	3,705
Phantom stock units		163		117		141
Stock options		-		-		-
Total	$	4,394	$	6,380	$	3,846

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, 2017 (amortization periods in years):

	Unrecognized Compensation Cost		Weighted Average Remaining Amortization Periods

Restricted stock units	$	2,900		1.0
Phantom stock units		-		0.0
Stock options		-		0.0
Total	$	2,900

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, 2017, the Company has reserved 3,158,000 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 is presented below (number of RSUs in thousands):

	Years ended December 31,
	2017					2016					2015
	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		1,004		$	12.74		1,028		$	13.24		1,147		$	12.75
Granted		304			15.52		353			11.35		349			13.60
Vested*		(322	)		13.54		(155	)		12.27		(182	)		11.41
Cancelled or forfeited		-			-		(222	)		13.19		(286	)		12.89
End of year		986		$	13.34		1,004		$	12.74		1,028		$	13.24

Expected to vest		986					1,004					806

* 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, 2018**		202		-		202
January 1, 2019		213		-		213
January 1, 2020		167		-		167

** The performance vesting criteria for the performance-based RSUs with a vesting date of January 1, 2018 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 (number of phantom stock units in thousands):

	Years ended December 31,
	2017				2016				2015
	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		145				132				119
Granted		10	$	16.25		10	$	11.71		10	$	14.09
Dividend equivalents issued		2				3				3
Redeemed for common stock		-				-				-
End of year		157				145				132

Stock Options

During the periods presented, the Company had stock options outstanding under the 2007 Program and previous stockholder-approved stock option programs.

Since December 31, 2013, all outstanding options had vested and were exercisable. As of December 31, 2015, approximately 105,000 options were outstanding. As of December 31, 2016, approximately 77,000 options were outstanding with a weighted average exercise price of $16.29. At December 31, 2017, there are no stock options outstanding.

There were no options granted in 2017, 2016, or 2015.

During the years ended December 31, 2017 and 2016, approximately 77,000 and 28,000 options were exercised, respectively. The total intrinsic value of options exercised during the years ended December 31, 2017 and 2016 was $20 and $85, respectively. No options were exercised during the year ended December 31, 2015.