Also on July 18, 2022, Vishay announced that Mr. Johan Vandoorn, Executive Vice President – Chief Technical Officer, Mr. Clarence Tse, Executive Vice President and Business Head Semiconductors, and Mr. David Valletta, Executive Vice President – Global Sales, will leave Vishay effective December 31, 2022, as part of the Company’s executive transition plan.
Mr. Vandoorn will be succeeded by Mr. Shoshani, as described above. The responsibilities of Mr. Tse will be absorbed by the Chief Operating Officer. The Company has not yet named a successor to Mr. Valletta.
Each departing executive is expected to continue to perform services, including assisting with the transition of their responsibilities, through December 31, 2022 and will continue to be compensated in accordance with existing arrangements through that time. The Board of Directors has determined that each executive’s termination of employment on December 31, 2022 will be without cause. Accordingly, provided that an executive’s employment is not earlier terminated due to his death, disability or a termination for cause, each departing executive will be entitled to severance benefits consistent with those described in his employment agreement, each of which has been filed with the U.S. Securities and Exchange Commission (“SEC”) and listed in the exhibit index of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 23, 2022. Generally, these severance benefits consist of three years of base salary continuation, an annual bonus for 2022 based on actual performance, the vesting of outstanding time-based equity grants and the survival of outstanding performance-based equity grants (which will vest or be forfeited based on actual performance through the end of the applicable performance periods). The severance benefits are conditioned upon the executive signing a release of claims and complying with his pre-existing restrictive covenants.
Executive Employment Agreements
As previously announced, effective January 1, 2023, Mr. Joel Smejkal will become our President and Chief Executive Officer and Mr. Jeff Webster will become our Executive Vice President – Chief Operating Officer, as part of the Company’s executive transition plan.
As part of the executive transition plan, on July 14, 2022, the Compensation Committee of the Board of Directors approved the execution of an employment agreement with Mr. Shoshani, and approved restatements of the employment agreements of Messrs. Smejkal, Webster and Henrici. The Compensation Committee also approved certain amendments to conform the employment agreements of Ms. Lori Lipcaman, our Executive Vice President and Chief Financial Officer, and Mr. Andreas Randebrock, our Executive Vice President – Global Human Resources, to the agreements of Messrs. Smejkal, Webster, Shoshani, and Henrici. (Collectively, the employment agreements with Messrs. Smejkal, Webster, Shoshani, Henrici, and Randebrock and Ms. Lipcaman, as amended, are herein referred to as the “Executive Employment Agreements.”) The Executive Employment Agreements are each effective as of January 1, 2023.
Pursuant to the Executive Employment Agreements, the minimum base salaries for 2023 were established as follows (with approximate U.S. dollar equivalents based on the average exchange rate for 2021, the same rate used in Vishay’s most recent proxy statement):
Joel Smejkal
|
| $900,000
| |
Lori Lipcaman
|
| €476,000 (approximately $560,000)(2)
| |
Jeff Webster
|
| ILS 1,850,000 (approximately $570,000)(1)
| |
Roy Shoshani
|
| $465,000
| |
Andreas Randebrock
|
| €345,000 (approximately $410,000)(2)
| |
Peter Henrici
|
| $410,000
| |
(1) Salary will be paid in Israeli shekels
(2) Salary will be paid in euro
Pursuant to the Executive Employment Agreements, Messrs. Smejkal, Webster, Shoshani, and Randebrock and Ms. Lipcaman will each be eligible for an annual cash bonus with a target amount equal to his or her annual base salary. Mr. Henrici will be eligible for an annual cash bonus with a target amount equal to 30% of his annual base salary.
Pursuant to the Executive Employment Agreements, in 2023, each executive officer will be eligible for an equity grant with a minimum underlying stock value on the grant date as follows (with approximate U.S. dollar equivalents based on the average exchange rate for 2021, the same rate used in Vishay’s most recent proxy statement):
Joel Smejkal
|
| $2,300,000
| |
Lori Lipcaman
|
| €800,000 (approximately $950,000)
| |
Jeff Webster
|
| ILS 4,350,000 (approximately $1,350,000)
| |
Roy Shoshani
|
| $780,000
| |
Andreas Randebrock
|
| €210,000 (approximately $250,000)
| |
Peter Henrici
|
| $400,000
| |
The 2023 equity grants will be in the form of restricted stock units (“RSUs”), of which 50% will be subject to performance-based vesting conditions.
In years subsequent to 2023, equity grants, and the portion of equity grants subject to performance-based vesting conditions, will be at the discretion of the Compensation Committee.
With respect to future equity grants, time-based vesting conditions will be deemed satisfied, and performance-based vesting conditions will remain in effect, upon the executive’s resignation for any reason following the attainment of age 62 (except where cause exists), death or disability. Also with respect to future equity grants, if a change in control occurs and the equity grants are assumed or continued by the surviving company, no accelerated vesting will occur. However, if the executive’s employment ceases due to a termination without cause or resignation with “good reason” upon or within one year following the change in control, time-based equity grants will then vest and performance-based grants will remain outstanding and will vest (or be forfeited) based on actual performance through the end of the applicable performance periods. If the equity grants are not assumed or continued, the grants will vest upon the change in control (with any performance-based vesting criteria deemed satisfied at the target level or, if greater, at the level of actual performance achieved through the date of the change in control).
There are no changes to the terms and conditions related to currently outstanding equity grants.
The Executive Employment Agreements provide severance benefits upon involuntary termination and customary non-compete and non-solicitation covenants. The severance benefits are generally consistent with those payable to Messrs. Vandoorn, Tse, and Valletta upon their terminations, as described above.
The agreement with Mr. Shoshani also includes a housing allowance of $5,068 per month, which is customary for Vishay employees on international assignments.
In contrast to the pre-existing employment agreements, the Executive Employment Agreements do not (i) include automatic equity vesting upon a change in control or (ii) treat change in control as a basis for resignation with severance benefits.
The foregoing summary is qualified in its entirety by reference to the Executive Employment Agreements, which are filed as Exhibits 10.2–10.7, respectively, to this Current Report on Form 8-K.
