AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 21, 2001
REGISTRATION NO. 333-68090
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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VISHAY INTERTECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 3670 381686453
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
AVI D. EDEN
63 LINCOLN HIGHWAY
MALVERN, PENNSYLVANIA 19355-2120
(610) 644-1300
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COPY TO:
SCOTT S. ROSENBLUM, ESQ.
ABBE L. DIENSTAG, ESQ.
KRAMER LEVIN NAFTALIS & FRANKEL LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
Approximate Date of Commencement of Proposed Sale to the Public: From
time to time after the effective date of this Registration Statement, as
determined by market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[_]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
$550,000,000
AGGREGATE PRINCIPAL AMOUNT
AT MATURITY
----------------
[LOGO]
VISHAY INTERTECHNOLOGY, INC.
LIQUID YIELD OPTION(TM) NOTES DUE 2021
(ZERO COUPON -- SUBORDINATED)
AND
SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION AND/OR PURCHASE OF THE LYONS
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THE OFFERING:
We issued the LYONs in a private placement in June 2001 at an issue price
of $551.26 per LYON (55.126% of the principal amount at maturity). Selling
securityholders will use this prospectus to resell their LYONs and the shares
of common stock issuable upon conversion and/or purchase by us of their LYONs.
We will not pay interest on the LYONs prior to maturity unless contingent
interest becomes payable. Instead, on June 4, 2021, the maturity date of the
LYONs, a holder will receive $1,000 per LYON. The issue price of each LYON
represents a yield to maturity of 3.0% per year calculated on a semi-annual
bond-equivalent basis from June 4, 2001, excluding any contingent interest. The
LYONs will be subordinated in right of payment to all of our existing and
future senior indebtedness.
CONVERTIBILITY OF THE LYONS:
Holders may convert each of their LYONs into 17.6686 shares of our common
stock at any time on or before the maturity date. The conversion rate may be
adjusted for certain reasons, but will not be adjusted for accrued original
issue discount. Our common stock is traded on the New York Stock Exchange under
the symbol "VSH." On November 20, 2001, the last reported sale price of our
common stock was $17.10 per share.
CONTINGENT INTEREST:
We will pay contingent interest to the holders of LYONs during the
six-month period commencing June 4, 2006 and during any six-month period
thereafter if the average market price of a LYON for a certain measurement
period immediately preceding the applicable six-month period equals 120% or
more of the sum of the issue price and accrued original issue discount for such
LYON. The amount of contingent interest payable during any six-month period
will be the sum of any contingent interest payable in the first and second
three-month periods during such six-month period. During any three-month period
in which contingent interest becomes payable, the contingent interest payable
per LYON for such period will be equal to the greater of (1) 0.0625% of the
average market price of a LYON for the measurement period referred to above or
(2) the sum of all regular cash dividends paid by us per share on our common
stock during such three-month period multiplied by the number of shares of
common stock issuable upon conversion of a LYON at the then applicable
conversion rate. For United States Federal income tax purposes, the LYONs will
constitute contingent payment debt instruments. You should read the discussion
of selected United States Federal income tax consequences relevant to the LYONs
beginning on page 34.
PURCHASE OF THE LYONS BY VISHAY AT THE OPTION OF THE HOLDER:
Holders may require us to purchase all or a portion of their LYONs on
June 4, 2004, 2006, 2011 and 2016 at the prices set forth in "Description of
LYONs--Purchase of LYONs by Vishay at Option of the Holder." We may choose to
pay the purchase price in cash or in common stock or a combination of cash and
common stock. In addition, upon a change in control or delisting event of
Vishay on or before June 4, 2006, each holder may require us to repurchase for
cash all or a portion of such holder's LYONs.
REDEMPTION OF THE LYONS AT THE OPTION OF VISHAY:
Vishay may redeem for cash all or a portion of the LYONs at any time on
or after June 4, 2006 at the prices set forth in "Description of
LYONs--Redemption of LYONs at the Option of Vishay."
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INVESTING IN THE LYONS INVOLVES RISKS THAT ARE DESCRIBED IN THE "RISK
FACTORS" SECTION BEGINNING ON PAGE 11 OF THIS PROSPECTUS.
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The date of this prospectus is November 21, 2001.
(TM)Trademark of Merrill Lynch & Co., Inc.
(CONTINUED FROM THE FRONT COVER)
We will not receive any of the proceeds from the sale of the LYONs or
shares of common stock by any of the selling securityholders. The LYONs and
shares of common stock may be offered in negotiated transactions or otherwise,
at market prices prevailing at the time of sale or at negotiated prices. In
addition, shares of common stock may be offered from time to time through
ordinary brokerage transactions on the New York Stock Exchange. See "Plan of
Distribution." The selling securityholders may be deemed to be "underwriters"
as defined in the Securities Act of 1933, as amended. Any profits realized by
the selling securityholders may be deemed to be underwriting commissions. If
the selling securityholders use any broker-dealers, any commissions paid to
broker-dealers and, if broker-dealers purchase any LYONs or shares of common
stock as principals, any profits received by such broker-dealers on the resale
of the LYONs or shares of common stock, may be deemed to be underwriting
discounts or commissions under the Securities Act.
Neither the Securities and Exchange Commission, any state securities
commission nor any other regulatory body has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
This prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
TABLE OF CONTENTS
Where You Can Find More Information.................. 3
Forward-Looking Information.......................... 4
Summary.............................................. 5
Risk Factors......................................... 10
Use of Proceeds...................................... 15
Ratio of Earnings to Fixed Charges................... 15
Description of LYONs................................. 15
Description of Capital Stock......................... 32
Certain United States Federal Income Tax Consequences 33
Selling Securityholders.............................. 38
Plan of Distribution................................. 40
Legal Matters........................................ 42
Experts.............................................. 42
You should rely only on the information contained or incorporated by
reference in this prospectus. Vishay Intertechnology, Inc. has not authorized
any other person to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it.
Vishay is not making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus is
accurate as of the date on the front cover of this prospectus only. The
business, financial condition, results of operations and prospects of Vishay
may have changed since that date.
References in this prospectus to "Vishay," "the Company," "we," "us" and
"our" refer to Vishay Intertechnology, Inc. and its consolidated subsidiaries,
unless otherwise specified.
2
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any public offering document we
file without charge at the SEC's Public Reference Room, 450 Fifth Street, N.W.,
Room 1024, Washington D.C., 20549.
You can also request copies of all or any portion of these documents by
writing the Public Reference Section and paying certain prescribed fees. Please
call the SEC at 1-800-SEC-0330 for further information on the Public Reference
Section. Additionally, these documents are available to the public from the
SEC's web site at http://www.sec.gov. You can also inspect reports, proxy
statements and other information about us at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
We are "incorporating by reference" into this prospectus certain
information that we file with the SEC. This means that we are disclosing
important information to you by referring to those documents. The information
incorporated by reference is considered to be part of this prospectus, except
for any information superseded by information contained directly in this
prospectus. Information that we file later with the SEC under the Exchange Act
will automatically update information in this prospectus. In all cases, you
should rely on the later information over different information included in
this prospectus. We incorporate by reference the documents listed below and any
future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until the end of the offering of LYONs and
Vishay common stock made under this prospectus:
. Current Report on Form 8-A filed on December 27, 1983;
. Annual Report on Form 10-K for the year ended December 31, 2000;
. Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
. Quarterly Report on Form 10-Q for the quarter ended June 30, 2001;
. Quarterly Report on Form 10-Q for the quarter ended September 30,
2001;
. Current Report on Form 8-K filed on June 18, 2001;
. Current Report on Form 8-K filed on October 26, 2001; and
. Current Report on Form 8-K filed on November 13, 2001.
You may request a copy of these filings, or any other documents or other
information referred to in, or incorporated by reference into, this prospectus,
at no cost, by writing or calling us at the following address or telephone
number:
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, Pennsylvania 19355-2120
(610) 644-1300
Exhibits to the documents incorporated by reference will not be sent,
however, unless those exhibits have been specifically referenced in this
prospectus.
3
FORWARD LOOKING INFORMATION
Some of the statements in this prospectus and in documents incorporated
by reference constitute forward-looking statements. These forward-looking
statements reflect our current views with respect to future events or our
financial performance, and involve certain known and unknown risks,
uncertainties and other factors, including those identified below, which may
cause our or our industry's actual or future results, levels of activity,
performance or achievements to differ materially from those expressed or
implied by any forward-looking statements or from historical results. In some
cases, you can identify forward-looking statements by terminology such as
"may," "will," "could," "would," "should," "believe," "expect," "plan,"
"anticipate," "intend," "estimate," "predict," "potential" and other
expressions which indicate future events and trends. We do not, nor does any
other person, assume responsibility for the accuracy and completeness of any
forward-looking statements. We have no duty to update or revise any
forward-looking statements after the date of this prospectus or to conform them
to actual results, new information, future events or otherwise. All of the
forward-looking statements are qualified in their entirety by reference to the
factors discussed in the section entitled "Management's Discussion and Analysis
of Financial Conditions and Results of Operations" of our most recent Annual
Report Form 10-K for the year ended December 31, 2000 and Quarterly Reports on
Form 10-Q for the quarter ended March 31, 2001, June 30, 2001 and September 30,
2001, respectively which describe risks and factors that could cause results to
differ materially from those projected in such forward looking statements.
The following factors, among others, could cause our or our industry's
future results to differ materially from historical results or those
anticipated:
. overall economic and business conditions;
. the demand for Vishay's goods and services;
. the fact that Vishay's customers may cancel orders they have placed
with us, in whole or in part, without advance notice;
. competitive factors in the industries in which Vishay competes;
. changes in governmental regulation;
. changes in tax requirements, including tax rate changes, new tax laws
and revised tax law interpretations;
. developments in and results of litigation;
. interest rate fluctuations, foreign currency rate fluctuations and
other capital market conditions;
. economic and political conditions in international markets, including
. governmental changes and restrictions on the ability to transfer
capital across borders;
. the timing, impact and other uncertainties of pending and future
acquisitions by Vishay;
. the ability to achieve anticipated synergies and other cost savings
in connection with such pending and future acquisitions; and
. the terrorist attacks on the United States on September 11, 2001, the
impact of such events on the economy in general and on the demand for
Vishay's goods and services in particular, and the impact of the
foregoing on Vishay's revenues and earnings.
These factors and the risk factors described in this document are not
necessarily all of the important factors that could cause actual results,
performance or achievements to differ materially from those expressed in any of
our forward-looking statements. We operate in a continually changing business
environment, and new risk factors emerge from time to time. Other unknown or
unpredictable factors also could have material adverse effects on our future
results, performance or achievements. We cannot assure you that projected
results or events will be achieved or will occur.
4
SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere or incorporated by reference in this prospectus.
Because this is a summary, it may not contain all the information that may be
important to you.
VISHAY INTERTECHNOLOGY, INC.
Vishay is a leading worldwide manufacturer and supplier of electronic
components. Vishay is the largest manufacturer of passive electronic components
(resistors, capacitors and inductors) in the United States and Europe and one
of the largest producers in the U.S. and Europe of discrete active electronic
components (diodes, optoelectronics and transistors), infrared data
communication devices, and power and analog switching integrated circuits.
Vishay manufactures electronic components at its facilities in the U.S. and
thirteen other countries in Europe, Asia and Latin America.
Vishay manufactures one of the broadest lines of passive and active
components in the electronics industry. In response to many customers' on-going
efforts to reduce the number of vendors from whom they purchase electronic
components, Vishay has developed a broad product line that enables it to be a
"total solutions provider." Components manufactured by Vishay are used in
virtually all types of electronic products, including:
. wireless telephones and other telecommunications equipment;
. information technology hardware;
. automotive electronic systems;
. industrial and commercial products; and
. systems and instruments for satellite, aerospace and military
applications.
Vishay's long-term objective is to expand its position as a low-cost
producer of a comprehensive line of electronic components. Vishay's growth
strategy includes:
. expansion of sales and range of products, primarily through
acquisitions of manufacturers with established positions in major
markets, reputations for product quality and reliability and product
lines with which Vishay has substantial marketing and technical
expertise;
. development of new products, manufacturing process technology and
product technology;
. achievement of significant production cost savings through the
transfer and expansion of manufacturing operations to countries such
as Israel, Mexico, Portugal, the Czech Republic, Taiwan and China,
which offer lower labor costs and tax and other government-sponsored
incentives;
. reduction in selling, general and administrative expenses through the
elimination of redundant sales offices and administrative functions;
and
. enhancement of service and responsiveness to customers by
manufacturing in those regions where Vishay markets the bulk of its
products.
Vishay was incorporated in Delaware in 1962 and maintains its principal
executive offices at 63 Lincoln Highway, Malvern, Pennsylvania 19355-2120. Our
telephone number is (610) 644-1300.
5
THE OFFERING
LYONs....................... $550,000,000 aggregate principal amount at
maturity of LYONs due June 4, 2021. Vishay will
not pay interest on the LYONs prior to maturity
unless contingent interest becomes payable. Each
LYON has been issued at a price of $551.26 per
LYON and has a principal amount at maturity of
$1,000.
Maturity of LYONs........... June 4, 2021.
Yield to Maturity of LYONs.. 3.0% per year (computed on a semi-annual bond
equivalent basis) calculated from June 4, 2001,
excluding any contingent interest.
Subordination............... The LYONs are subordinated in right of payment
to all of our existing and future senior
indebtedness and will effectively be
subordinated to all existing and future
liabilities of our subsidiaries. The indenture
under which the LYONs are issued does not limit
the ability of Vishay and its subsidiaries to
incur additional indebtedness. See "Description
of LYONs--Subordination of LYONs."
Original Issue Discount Vishay issued the LYONs at an issue price
significantly below the principal amount at
maturity of the LYONs. The difference between
the issue price and the principal amount at
maturity of a LYON is referred to as original
issue discount. This original issue discount
accrues daily at a rate of 3.0% per year
beginning on June 4, 2001, calculated on a
semi-annual bond equivalent basis, using a
360-day year comprised of twelve 30 day months.
The accrual of imputed interest income, also
referred to as tax original issue discount, as
calculated for United States Federal income tax
purposes, will exceed the accrued original issue
discount. See "Certain United States Federal
Income Tax Consequences--Accrual of Interest on
the LYONs."
Conversion Rights........... Holders may convert the LYONs at any time on or
before close of business on the second business
day immediately preceding the maturity date,
unless the LYONs have been previously redeemed
or purchased. For each LYON converted, Vishay
will deliver 17.6686 shares of our common stock.
The LYONs will not be convertible into shares of
our Class B common stock. See "Risk
Factors--Risk Factors Related to Vishay--Risks
Related to Vishay's Capital Structure--The
holders of Class B common stock have voting
control of Vishay" and "Description of Capital
Stock."
The conversion rate may be adjusted for certain
reasons specified in the indenture, but will not
be adjusted for accrued original issue discount.
Upon conversion, a holder will not receive any
cash payment representing accrued original issue
discount or accrued tax original issue discount.
Instead, accrued original issue discount and
accrued tax original issue discount will be
deemed paid by the
6
shares of common stock received by the holder on
conversion. See "Description of
LYONs--Conversion Rights."
Contingent Interest......... Vishay will pay contingent interest to the
holders of LYONs during any six-month period
from June 4 to December 3 and from December 4 to
June 3, with the initial six-month period
commencing June 4, 2006, if the average market
price of a LYON for the five trading days ending
on the third trading day immediately preceding
the first day of the applicable six-month period
equals 120% or more of the sum of the issue
price and accrued original issue discount for
such LYON. Notwithstanding the above, if Vishay
declares a dividend for which the record date
falls prior to the first day of a six-month
period but the payment date falls within such
six-month period, then the five trading day
period for determining the average market price
of a LYON will be the five trading days ending
on the third trading day immediately preceding
such record date.
The amount of contingent interest payable during
any six-month period will be the sum of any
contingent interest payable in the first and
second three-month periods during such six-month
period. During any three-month period when
contingent interest shall be payable, the
contingent interest payable per LYON for such
period will be equal to the greater of (1)
0.0625% of the average market price of a LYON
for the measurement period referred to above or
(2) the sum of all regular cash dividends paid
by us per share on our common stock during such
three-month period multiplied by the number of
shares of common stock issuable upon conversion
of a LYON at the then applicable conversion rate.
Contingent interest, if any, will be payable to
holders of LYONs as of the 15th day preceding
the last day of the relevant six-month period
or, if Vishay pays a regular cash dividend on
our common stock during the relevant six-month
period, to holders of LYONs as of the record
date for the related common stock dividend. We
will make contingent interest payments on the
last day of the relevant six-month period or, if
we pay a regular cash dividend on our common
stock during the relevant six-month period, on
the payment date of the related common stock
dividend. The original issue discount will
continue to accrue at the yield to maturity
whether or not contingent interest is paid.
Tax Original Issue Discount. The LYONs are debt instruments subject to the
United States Federal income tax contingent
payment debt regulations. You should be aware
that, even if we do not pay any contingent
interest on the LYONs, you will be required to
include interest in your gross income for United
States Federal income tax purposes. This imputed
interest, also referred to as tax original issue
discount, will accrue at a rate equal to 9.28%
per year, computed on a semi-annual bond
equivalent basis, which represents the yield on
our noncontingent,
7
nonconvertible, fixed-rate debt with terms
otherwise similar to the LYONs. The rate at
which the tax original issue discount will
accrue for United States Federal income tax
purposes will exceed the stated yield of 3.0%
for the accrued original issue discount.
You will also recognize gain or loss on the
sale, exchange, conversion or redemption of a
LYON in an amount equal to the difference
between the amount realized on the sale,
exchange, conversion or redemption, including
the fair market value of any common stock
received upon conversion or otherwise, and your
adjusted tax basis in the LYON. Any gain
recognized by you on the sale, exchange,
conversion or redemption of a LYON generally
will be ordinary interest income; any loss will
be ordinary loss to the extent of the interest
previously included in income, and thereafter,
capital loss. See "Certain United States Federal
Income Tax Consequences."
Purchase of LYONs by Vishay
at the Option of the Holder Holders may require us to purchase all or a
portion of their LYONs on the following dates at
the following prices:
. on June 4, 2004 for a price equal $602.77
per LYON;
. on June 4, 2006 for a price equal $639.76
per LYON;
. on June 4, 2011 for a price equal $742.47
per LYON; and
. on June 4, 2016 for a price equal $861.67
per LYON.
We may choose to pay the purchase price in cash,
common stock (based on the prevailing market
price thereof) or a combination of cash and
common stock. See "Description of
LYONs--Purchase of LYONs by Vishay at the Option
of the Holder."
Change in Control or
Delisting Event........... Upon a change in control or delisting event
(which we refer to as "trigger events") of
Vishay occurring on or before June 4, 2006, each
holder may require us to repurchase all or a
portion of such holder's LYONs for cash at a
price equal to 100% of the issue price for such
LYONs plus accrued original issue discount to
the date of repurchase. See "Description of
LYONs--Change in Control or Delisting Event
Permits Purchase of LYONs at the Option of the
Holder."
Redemption of LYONs at the
Option of Vishay.......... We may redeem all or a portion of the LYONs for
cash at any time on or after June 4, 2006 at the
redemption prices set forth in "Description of
LYONs--Redemption of LYONs at the Option of
Vishay."
Sinking Fund................ None.
8
Use of Proceeds............. We will not receive any of the proceeds from the
sale by the selling securityholders of the LYONs
or our common stock using this prospectus. See
"Use of Proceeds."
DTC Eligibility............. The LYONs have been issued in book-entry form
and are represented by permanent global
certificates without coupons deposited with a
custodian for and registered in the name of a
nominee of DTC in New York, New York. Beneficial
interests in any such securities are shown on,
and transfers are effected only through, records
maintained by DTC and its direct and indirect
participants, and any such interest may not be
exchanged for certificated securities, except in
limited circumstances. See "Description of
LYONs--Book-Entry System."
Trading..................... The LYONs issued in the initial private
placement are eligible for trading in the PORTAL
system. LYONs resold using this prospectus,
however, will no longer be eligible for trading
in the PORTAL system. Our common stock is traded
on the New York Stock Exchange under the symbol
"VSH."
9
RISK FACTORS
Prospective investors should carefully consider the following information
with the other information contained or incorporated by reference in this
prospectus before purchasing the LYON or our common stock.
RISK FACTORS RELATING TO VISHAY'S BUSINESS GENERALLY
OUR BUSINESS IS CYCLICAL AND THE CURRENT DECLINE IN DEMAND IN THE
ELECTRONIC COMPONENT INDUSTRY MAY CONTINUE AND MAY BECOME MORE PRONOUNCED.
Vishay and others in the electronic and semiconductor component industry
have recently experienced a decline in product demand on a global basis,
resulting in order cancellations and deferrals. This decline is primarily
attributable to a slowing of growth in the personal computer and cellular
telephone product markets. This slowdown may continue and may become more
pronounced. The current slowdown in demand, as well as recessionary trends in
the global economy, makes it more difficult for Vishay to predict its future
sales, which also makes it more difficult to manage its operations, and could
adversely impact Vishay's results of operations. In the past, adverse economic
trends that resulted in a slowdown in demand for electronic components have
materially and adversely impacted Vishay's results of operations. A decrease in
the current demand for Vishay's products, or an increase in supply due to the
expansion of production capacity by Vishay's competitors, could cause a
significant drop in Vishay's average sales prices, which could, in turn, cause
a reduction in Vishay's gross margins and operating profits. In addition, at
the initial stage of a business cycle, increased efforts by distributors to
sell inventory remaining from the prior cycle may cause average selling prices
to decrease. Vishay's published operating results for the first half of 2001
reflect some of these industry trends. For example, during the first nine
months of 2001 restructuring costs were $47.1 million as a result of Vishay's
accelerated effort to streamline operations in response to the continued
weakness in the electronic components market at the time. Vishay estimates that
it will incur additional restructuring costs during 2001 of approximately $23
million.
IN THE PAST VISHAY HAS GROWN THROUGH ACQUISITIONS BUT THIS MAY NOT CONTINUE.
Vishay's long-term historical growth in revenues and net earnings has
resulted in large part from its strategy of expansion through acquisitions.
However, we cannot assure you that Vishay will identify or successfully
complete transactions with suitable acquisition candidates in the future. We
also cannot assure you that acquisitions Vishay completes in the future will be
successful. If an acquired business fails to operate as anticipated or cannot
be successfully integrated with Vishay's other businesses, Vishay's results of
operations, enterprise value, market value and prospects could all be
materially and adversely affected.
FUTURE ACQUISITIONS COULD REQUIRE VISHAY TO ISSUE ADDITIONAL INDEBTEDNESS OR
EQUITY.
If Vishay were to undertake a substantial acquisition for cash, the
acquisition would likely need to be financed in part through bank borrowings or
the issuance of public or private debt. This would likely decrease Vishay's
ratio of earnings to fixed charges and adversely affect other leverage
criteria. Under Vishay's existing credit facility, Vishay is required to obtain
the lenders' consent for certain additional debt financing, is required to
comply with other covenants including the application of specific financial
ratios and is restricted from paying cash dividends on its capital stock. We
cannot assure you that the necessary acquisition financing would be available
to Vishay on acceptable terms when required. If Vishay were to undertake an
acquisition for equity, the acquisition may have a dilutive effect on the
interests of the holders of Vishay common stock.
VISHAY'S RESULTS ARE SENSITIVE TO RAW MATERIAL AVAILABILITY, QUALITY AND COST.
Many of Vishay's products require the use of raw materials that are
produced in only a limited number of regions around the world or are available
from only a limited number of suppliers. Vishay's results of
10
operations may be materially and adversely affected if Vishay has difficulty
obtaining these raw materials, the quality of available raw materials
deteriorates or there are significant price increases for these raw materials.
For example, the prices for tantalum and palladium, two raw materials that
Vishay uses in its capacitors, are subject to fluctuation. For periods in which
the prices of these raw materials are rising Vishay may be unable to pass on
the increased cost to Vishay's customers which would result in decreased
margins for the products in which they are used. For periods in which the
prices are declining, Vishay may be required to write down its inventory
carrying cost of these raw materials which, depending on the extent of the
difference between market price and its carrying cost, could have a material
adverse effect on Vishay's net earnings.
Vishay is a major consumer of the world's annual production of tantalum.
Tantalum, a metal purchased in powder or wire form, is the principal material
used in the manufacture of tantalum capacitors. There are currently three major
suppliers that process tantalum ore into capacitor grade tantalum powder. Due
to the strong demand for its tantalum capacitors and difficulty in obtaining
sufficient quantities of tantalum powder from its suppliers, Vishay stockpiled
tantalum ore in 2000 and early 2001. During the nine months ended September 30,
2001, Vishay experienced a significant decrease in sales due to declining
orders and the deferral or cancellation of existing orders. Vishay's tantalum
capacitor business was particularly impacted by the slowdown in sales. Prices
for tantalum ore and powder decreased during this period. As a result, Vishay
has recorded write-downs of $17,000,000 and $37,000,000 on tantalum during the
quarter and nine months ended September 30, 2001, respectively. Vishay has
entered into long-term take or pay contracts to purchase specified quantities
of tantalum at fixed prices through 2005. Under these contracts, the annual
tantalum purchase commitments are approximately $47,000,000 for 2001 and
$150,000,000 for 2002 through 2005. In addition, Vishay makes purchase of
tantalum from its other suppliers under annual contracts at prices that are
subject to periodic adjustment. Depending on the extent of the downward pricing
trend for tantalum ore, Vishay could again be required to write down the
carrying cost of our inventory of tantalum ore, which could have a material
adverse effect on Vishay's net earnings.
Palladium, a metal used to produce multi-layered ceramic capacitors, is
currently found in primarily South Africa and Russia. Palladium is a commodity
product subject to price volatility. The price of palladium has fluctuated in
the range of approximately $201 to $970 per troy ounce during the last three
years, and as of September 30, 2001, the price of Palladium was $360 per troy
ounce. During the quarter ended September 30, 2001, the Company recorded in
cost of products sold a writedown of $18,000,000 on palladium inventories. As
of November 16, 2001, the price of palladium was approximately $340 per troy
ounce.
From time to time there have been short-term market shortages of raw
materials. While these shortages have not historically adversely affected
Vishay's ability to increase production of products containing tantalum and
palladium, they have historically resulted in higher raw material costs for
Vishay. Vishay cannot assure you that any of these market shortages in the
future would not adversely affect Vishay's ability to increase production,
particularly during periods of growing demand for Vishay's products.
VISHAY'S BACKLOG IS SUBJECT TO CUSTOMER CANCELLATION.
Many of the orders that comprise Vishay's backlog may be canceled by
customers without penalty. Customers may on occasion double and triple order
components from multiple sources to ensure timely delivery when backlog is
particularly long. Customers often cancel orders when business is weak and
inventories are excessive, a phenomenon that Vishay has experienced in the
current economic slowdown. Therefore, Vishay cannot be certain the amount of
its backlog does not exceed the level of orders that will ultimately be
delivered. Vishay's results of operations could be adversely impacted if
customers cancel a material portion of orders in Vishay's backlog.
11
VISHAY FACES INTENSE COMPETITION IN ITS BUSINESS.
Vishey's business is highly competitive worldwide, with low
transportation costs and few import barriers. Vishay competes principally on
the basis of product quality and reliability, availability, customer service,
technological innovation, timely delivery and price. The electronics components
industry has become increasingly concentrated and globalized in recent years
and Vishay's major competitors, some of which are larger than Vishay, have
significant financial resources and technological capabilities.
VISHAY MAY NOT HAVE ADEQUATE FACILITIES TO SATISFY FUTURE INCREASES IN DEMAND
FOR ITS PRODUCTS.
Vishay's business is cyclical and in periods of a rising economy may
experience intense demand for its products. During such periods, Vishay may
have difficulty expanding its manufacturing to satisfy demand. Factors which
could limit such expansion include delays in procurement of manufacturing
equipment, shortages of skilled personnel and capacity constraints at Vishay's
facilities. If Vishay is unable to meet its customers' requirements and its
competitors sufficiently expand production, Vishay could lose customers and/or
market share. This could have an adverse effect on Vishay's financial condition
and results of operations and prospects.
FUTURE CHANGES IN VISHAY'S ENVIRONMENTAL LIABILITY AND COMPLIANCE OBLIGATIONS
MAY HARM VISHAY'S ABILITY TO OPERATE OR INCREASE COSTS.
Vishay's manufacturing operations, products and/or product packaging are
subject to environmental laws and regulations governing air emissions,
wastewater discharges, the handling, disposal and remediation of hazardous
substances, wastes and certain chemicals used or generated in Vishay's
manufacturing processes, employee health and safety labelling or other
notifications with respect to the content or other aspects of Vishay's
processes, products or packaging, restrictions on the use of certain materials
in or on design aspects of Vishay's products or product packaging and
responsibility for disposal of products or product packaging. More stringent
environmental regulations may be enacted in the future, and Vishay cannot
presently determine the modifications, if any, in Vishay's operations that any
such future regulations might require, or the cost of compliance with these
regulations. In order to resolve liabilities at various sites, Vishay has
entered into various administrative orders and consent decrees, some of which
may be, under certain conditions, reopened or subject to renegotiation.
RISK FACTORS RELATING TO VISHAY'S OPERATIONS OUTSIDE THE UNITED STATES
VISHAY OBTAINS SUBSTANTIAL BENEFITS BY OPERATING IN ISRAEL, BUT THESE BENEFITS
MAY NOT CONTINUE.
Vishay has increased its operations in Israel over the past several
years. The low tax rates in Israel applicable to earnings of Vishay's
operations in that country, compared to the rates in the United States, have
had the effect of increasing Vishay's net earnings. In addition, Vishay has
taken advantage of certain incentive programs in Israel, which take the form of
grants designed to increase employment in Israel. Any significant increase in
the Israeli tax rates or reduction or elimination of the Israeli grant programs
that have benefited Vishay could have an adverse impact on Vishay's results of
operations. See Note 1 to the Consolidated Financial Statements in Vishay's
Annual Report on Form 10-K for the year ended December 31, 2000, incorporated
by reference in this prospectus, for a description of Vishay's accounting
policy for grants received by certain subsidiaries from governments outside the
United States.
VISHAY ATTEMPTS TO IMPROVE PROFITABILITY BY OPERATING IN COUNTRIES IN WHICH
LABOR COSTS ARE LOW, BUT THE SHIFT OF OPERATIONS TO THESE REGIONS MAY ENTAIL
CONSIDERABLE EXPENSE.
Vishay's strategy is aimed at achieving significant production cost
savings through the transfer and expansion of manufacturing operations to and
in countries with lower production costs, such as Israel, Mexico,
12
Portugal, the Czech Republic, Taiwan and China. In this process, Vishay may
experience under-utilization of certain plants and factories in high labor cost
regions and capacity constraints in plants and factories located in low labor
cost regions. This may result initially in production inefficiencies and higher
costs. These costs include those associated with compensation in connection
with work force reductions and plant closings in the higher labor cost regions,
and start-up expenses, manufacturing and construction delays, and increased
depreciation costs in connection with the initiation or expansion of production
in lower labor cost regions.
As Vishay implements transfers of certain of its operations it may
experience strikes or other types of labor unrest as a result of lay-offs or
termination of Vishay's employees in high labor cost countries.
VISHAY IS SUBJECT TO THE RISKS OF POLITICAL, ECONOMIC AND MILITARY INSTABILITY
IN COUNTRIES OUTSIDE THE U.S. IN WHICH IT OPERATES.
Vishay has operations in 12 countries around the world outside the United
States, and approximately 56% of Vishay's revenues during 2000 were derived
from sales to customers outside the United States. Some of the countries in
which Vishay operates have in the past experienced and may continue to
experience political, economic and military instability or unrest. These
conditions could have an adverse impact on the ability of Vishay to operate in
these regions and, depending on the extent and severity of these conditions,
could materially and adversely affect Vishay's overall financial condition and
operating results.
RISKS RELATING TO VISHAY'S CAPITAL STRUCTURE
THE HOLDERS OF CLASS B COMMON STOCK HAVE VOTING CONTROL OF VISHAY.
Vishay has two classes of common stock: common stock and Class B common
stock. The holders of common stock are entitled to one vote for each share
held, while the holders of Class B common stock are entitled to 10 votes for
each share held. Currently, the principal holder of Class B common stock
controls approximately 50.4% of the outstanding voting power of Vishay. As a
result, this holder of Class B common stock is able to cause the election of
the entire board of directors of Vishay. This holder of the Class B common
stock may also be able to approve other actions as stockholders without
obtaining the votes of other stockholders of Vishay.
THE EXISTENCE OF THE CLASS B COMMON STOCK MAY DEPRIVE OTHER STOCKHOLDERS OF A
PREMIUM VALUE FOR THEIR SHARES IN A TAKEOVER.
The effective control of Vishay by holders of the Class B common stock
may make Vishay less attractive as a target for a takeover proposal. It may
also make it more difficult or discourage a merger proposal or proxy contest
for the removal of the incumbent directors, even if such actions were favored
by all stockholders of Vishay other than the holders of the Class B common
stock. Accordingly, this may deprive the holders of common stock of an
opportunity they might otherwise have to sell their shares at a premium over
the prevailing market price in connection with a merger or acquisition of
Vishay with or by another company.
RISK FACTORS RELATING TO THE LYONS
AN ACTIVE TRADING MARKET FOR LYONS MAY NOT DEVELOP.
Despite the fact that resales of the LYONs will be registered
transactions under the Securities Act, we cannot assure you that an active
trading market for the LYONs will develop and, if developed, the liquidity or
sustainability of any such market. Moreover, we cannot assure you that you will
be able to sell LYONs or, if sold, the price you would receive. Future trading
prices of the LYONs will depend on many factors, including,
13
among other things, prevailing interest rates, our operating results, the
market price of our common stock and the market for similar securities.
WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE THE
PURCHASE OF LYONS AT THE OPTION OF THE HOLDERS OR AS A RESULT OF A CHANGE IN
CONTROL OR DELISTING EVENT.
We may be required to repurchase the LYONs for cash prior to their stated
maturity upon the occurrence of certain events, including (a) the occurrence of
certain specific kinds of change in control events or a delisting event
resulting from the acquisition of Vishay common stock by Vishay or its
affiliates, in each case occurring on or before June 4, 2006, and (b) our
failure to satisfy the conditions for the delivery of our common stock in
connection with holders' requests that we repurchase their LYONs on June 4,
2004, 2006, 2011 and 2016. However, it is possible that we will not have
sufficient funds at that time to make the required repurchase of LYONs for cash
or that restrictions in our other indebtedness will not allow those repurchases
for cash. In addition, certain important corporate events, such as leveraged
recapitalizations that would increase the level of our indebtedness, would not
constitute a "change in control" under the indenture. See "Description of
LYONs--Purchase of LYONs by Vishay at the Option of the Holder" and "--Change
in Control or Delisting Event Permits Purchase of LYONs at the Option of the
Holder."
YOU SHOULD CONSIDER THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF OWNING
LYONS.
The LYONS are characterized as indebtedness of ours for United States
Federal income tax purposes. Accordingly, you will be required to include in
your income interest with respect to the LYONS.
The LYONS will constitute contingent payment debt instruments. As a
result, you will be required to include amounts in income, as ordinary income,
in advance of the receipt and in excess of the cash attributable thereto. The
amount of interest income required to be included by you for each year will be
in excess of the yield to maturity of the LYONs. You will recognize gain or
loss on the sale, purchase by us at your option, conversion or redemption of a
LYON in an amount equal to the difference between the amount realized on the
sale, purchase by us at your option, conversion or redemption, including the
fair market value of any common stock received upon conversion or otherwise,
and your adjusted tax basis in the LYON. Any gain recognized by you on the
sale, purchase by us at your option, conversion or redemption of a LYON
generally will be ordinary interest income; any loss will be ordinary loss to
the extent of the interest previously included in income, and thereafter,
capital loss. A summary of the United States Federal income tax consequences of
ownership of the LYONS is described in this prospectus under the heading
"Certain United States Federal Income Tax Consequences."
14
USE OF PROCEEDS
We will not receive any of the proceeds from the resale of the LYONs or
of any common stock issuable upon conversion of the LYONs by the selling
securityholders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the nine months ended September 30, 2001 and for each of the preceding five
fiscal years. In calculating these ratios, earnings include pre-tax income
before adjustment for minority interest in consolidated subsidiaries plus fixed
charges and exclude equity in net income of our affiliates. Fixed charges
include gross interest expense, amortization of deferred financing expenses and
an amount equivalent to interest included in rental charges. We have assumed
that one-third of rental expense is representative of the interest factor.
NINE
MONTHS
ENDED FISCAL YEAR ENDED DECEMBER 31,
- SEPTEMBER 30, ------------------------------
2001 2000 1999 1998 1997 1996
------------- ----- ---- ---- ---- ----
Ratio of earnings to fixed charges 5.42 21.35 3.16 1.72 4.96 4.36
DESCRIPTION OF LYONS
We issued the LYONs under an indenture dated as of June 4, 2001, between
us and The Bank of New York, as trustee. The following summarizes the material
provisions of the LYONs and the indenture. The following summary is not
complete and is subject to, and qualified by reference to, all of the
provisions of the LYONs and the indenture. The indenture, which contains a form
of the LYONs, is incorporated by reference as an exhibit to the registration
statement of which this prospectus is a part.
As used in this section, the words "we," "us," "our" or "Vishay" do not
include any current or future subsidiary of Vishay.
GENERAL
On June 4, 2001, we issued $550,000,000 million aggregate principal
amount at maturity of the LYONs in a private placement. The LYONs will mature
on June 4, 2021. The principal amount at maturity of each LYON is $1,000. The
LYONs will be payable at the office of the paying agent, which initially is an
office or agency of the trustee, or an office or agency maintained by us for
such purpose, in the Borough of Manhattan, The City of New York. (Indenture,
Section 4.05)
We issued each LYON at an issue price of $551.26 per LYON, which
represents a substantial discount from its principal amount at maturity. Except
as described below, we will not make periodic payments of interest on the
LYONs. However, the LYONs accrue original issue discount while they remain
outstanding. Original issue discount is the difference between the issue price
and the principal amount at maturity of a LYON. Accrual of original issue
discount is calculated on a semi-annual bond equivalent basis, using a 360-day
year composed of twelve 30-day months. The original issue discount began to
accrue on the LYONs on June 4, 2001. (LYON, Section 1)
The LYONs are debt instruments subject to the contingent payment debt
regulations under the Internal Revenue Code. The LYONs were issued with
original issue discount for United States federal income tax
15
purposes. Even if we do not pay any cash interest (including any contingent
interest) on the LYONs, holders will be required to include accrued tax
original issue discount in their gross income for United States federal income
tax purposes. The rate at which the tax original issue discount accrues exceeds
the stated yield of 3.00% for the accrued original issue discount described
above. See "Certain United States Federal Income Tax Consequences."
Maturity, conversion, purchase by us at the option of a holder or
redemption of a LYON will cause original issue discount and interest, if any,
to cease to accrue on such LYON.
LYONs may be presented for conversion at the office of the conversion
agent, and for exchange or registration of transfer at the office of the
registrar, each such agent initially being the trustee.
SUBORDINATION OF LYONS
Indebtedness evidenced by the LYONs is subordinated in right of payment
as set forth in the indenture, to the prior payment in full of all of our
existing and future senior indebtedness (as defined below). (Indenture, Section
10.02) Upon any payment or distribution of assets of Vishay to creditors, upon
any dissolution, winding up, liquidation or reorganization of Vishay or
arrangement, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other similar proceedings, the holders of all senior
indebtedness shall first be entitled to receive in cash payment in full of all
amounts due or to become due thereon, or payment of such amounts shall have
been provided for, before the holders of the LYONs shall be entitled to receive
any payment or distribution with respect to any LYONs. As a result, holders of
LYONs may recover less, ratably, than the holders of senior indebtedness.
(Indenture, Section 10.02)
In addition, no payment of the principal amount at maturity, issue price,
accrued contingent interest, purchase price, redemption price or trigger event
purchase price with respect to any LYONs may be made by Vishay, nor may Vishay
pay cash with respect to the purchase price of any LYON (other than for
fractional shares) or otherwise acquire any LYONs (except as set forth in the
indenture), if (i) any payment default on any senior indebtedness has occurred
and is continuing beyond any applicable grace period or (ii) any default other
than a payment default with respect to senior indebtedness occurs and is
continuing that permits the acceleration of the maturity thereof and the
default is the subject of judicial proceedings or the trustee receives a
written notice of such default from Vishay or the holders of such senior
indebtedness (a "senior indebtedness default notice"). Notwithstanding the
foregoing, payments with respect to the LYONs may resume and Vishay may acquire
LYONs for cash (a) in the case of a default described in (i) above, when the
default with respect to the senior indebtedness is cured or waived or (b) in
the case of default described in (ii) above, on and after the earlier to occur
of the date the default with respect to the senior indebtedness is cured or
waived or 179 days after the date the senior indebtedness default notice is
received unless the maturity of the senior indebtedness has been accelerated,
provided that the terms of the indenture otherwise permit the payment or
acquisition of the LYONs at that time. If Vishay receives a senior indebtedness
default notice, then a similar notice received within nine months thereafter
relating to the same default on the same issue of senior indebtedness shall not
be effective to prevent the payment or acquisition of the LYONs as provided
above. In the event that the LYONs are declared due and payable prior to their
stated maturity by reason of the occurrence of any event of default, then
Vishay will be obligated to notify promptly holders of senior indebtedness of
such acceleration. Vishay may not pay a holder of LYONs until the earlier of
(i) 120 days have passed after such acceleration occurs or (ii) the payment in
full of all senior indebtedness and may thereafter pay a holder of LYONs if the
terms of the indenture otherwise permit payment at that time. (Indenture,
Section 10.04)
The term "senior indebtedness" of Vishay means, the principal, premium
(if any) and unpaid interest on all present and future:
. indebtedness of Vishay for borrowed money;
. obligations of Vishay evidenced by bonds, debentures, notes or
similar instruments;
16
. all obligations of Vishay under (a) interest rate swaps, caps,
collars, options, and similar arrangements, (b) any foreign exchange
contract, currency swap contract, futures contract, currency option
contract, or other foreign currency hedge or any other hedging
agreements, and (c) credit swaps, caps, floors, collars, and similar
arrangements;
. indebtedness incurred, assumed or guaranteed by Vishay in connection
with the acquisition by it or a subsidiary of Vishay of any business,
properties or assets (except purchase-money indebtedness classified
as accounts payable under generally accepted accounting principles);
. obligations of Vishay as lessee under leases required to be
capitalized in the balance sheet of the lessee under generally
accepted accounting principles;
. reimbursement obligations of Vishay in respect of letters of credit
relating to indebtedness or other obligations of Vishay that qualify
as indebtedness or obligations of the kind referred to in clauses (i)
through (v) above;
. pension plan obligations; and
. obligations of Vishay under direct or indirect guarantees in respect
of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds
referred to above, in each case unless in the instrument creating or
evidencing the indebtedness or obligation or pursuant to which the
same is outstanding it is provided that such indebtedness or
obligation is not superior in right of payment to the LYONs.
(Indenture, Section 1.01)
The LYONs are effectively subordinated to all existing and future
liabilities, including trade payables, of our subsidiaries. Any right of ours
to participate in any distribution of the assets of any of our subsidiaries
upon liquidation, reorganization or insolvency of such subsidiary, and the
consequent right of the Holders of the LYONs to participate in those assets,
will be subject to the claims of the creditors, including trade creditors, of
such subsidiary, except to the extent that our claims as a creditor of such
subsidiary may be recognized, in which case our claims would still be
subordinate to any security interest in the assets of such subsidiary and any
indebtedness of such subsidiary senior to that held by us.
There is no restriction under the indenture on Vishay or any of its
subsidiaries incurring additional indebtedness, including senior indebtedness.
CONVERSION RIGHTS
A holder may convert a LYON, in multiples of $1,000 principal amount at
maturity, into shares of our common stock at any time on or before the close of
business on the second business day immediately preceding June 4, 2021.
(Indenture, Section 11.01) If we call a LYON for redemption, a holder may
convert such LYON only until the close of business on the second business day
immediately preceding the redemption date. A LYON for which a holder has
delivered a purchase notice or a trigger event purchase notice requiring us to
purchase the LYON may be converted only if such notice is withdrawn in
accordance with the indenture. (Indenture, Section 3.08) "Business day" means
any day other than a Saturday or Sunday or other than a day on which banking
institutions in The City of New York are required or authorized by law or
executive order to close. (Indenture, Section 1.01)
The initial conversion rate is 17.6686 shares of common stock per LYON,
subject to adjustment upon the occurrence of certain events described below.
(LYON, Section 10) A holder of a LYON otherwise entitled to a fractional share
will receive cash in an amount equal to the value of such fractional share
based on the sale price, as defined below, on the trading day immediately
preceding the conversion date. (Indenture, Section 11.03)
17
DELIVERY OF COMMON STOCK. On conversion of a LYON, a holder will not
receive any cash payment of interest representing accrued original issue
discount or, except as described below, contingent interest. Our delivery to
the holder of the full number of shares of common stock into which the LYON is
convertible, together with any cash payment for such holder's fractional
shares, will be deemed:
. to satisfy our obligation to pay the principal amount at maturity of
the LYON; and
. to satisfy our obligation to pay accrued original issue discount and
accrued tax original issue discount attributable to the period from
the issue date through the conversion date.
As a result, accrued original issue discount and accrued tax original
issue discount will be deemed to be paid in full rather than cancelled,
extinguished or forfeited. (Indenture, Section 11.02)
The conversion rate will not be adjusted for accrued original issue
discount or any contingent interest. A certificate for the number of full
shares of common stock into which any LYON is converted, together with any cash
payment for fractional shares, will be delivered through the conversion agent
as soon as practicable following the conversion date. For a discussion of the
tax treatment of a holder receiving shares of common stock upon conversion, see
"Certain United States Federal Income Tax Consequences --Sale, Exchange,
Conversion or Redemption."
To convert a LYON into shares of common stock, a holder must:
. complete and manually sign the conversion notice on the back of the
LYON or complete and manually sign a facsimile of the conversion
notice and deliver the conversion notice to the conversion agent;
. surrender the LYON to the conversion agent;
. if required by the conversion agent, Vishay or the trustee, furnish
appropriate endorsements and transfer documents; and
. if required, pay all transfer or similar taxes. (LYON, Section 10)
The date on which all of the foregoing requirements have been satisfied
is the conversion date.
CONVERSION RATE ADJUSTMENTS. The conversion rate will be adjusted for:
. dividends or distributions on our shares of common stock payable in
shares of our common stock or other capital stock;
. subdivisions, combinations or certain reclassifications of shares of
our common stock;
. distributions to all holders of shares of common stock of certain
rights to purchase shares of common stock for a period expiring
within 60 days at less than the sale price of the common stock at the
time (the method of calculating the sale price of our common stock
for the purpose of the indenture is set forth on page 23); and
. distributions to all holders of our shares of common stock of our
assets (including shares of capital stock of, or similar equity
interests in, a subsidiary or other business unit of ours) or debt
securities or certain rights to purchase our securities (excluding
cash dividends or other cash distributions from current or retained
earnings other than extraordinary cash dividends). "Extraordinary
cash dividends" means the amount of any cash dividend or distribution
that, together with all other cash dividends paid during the
preceding 12-month period, are on a per share basis in excess of the
sum of (i) 5% of the sale price of the shares of common stock on the
day preceding the date of declaration of such dividend or
distribution, and (ii) an amount equal to the quotient of (x) the
amount of any contingent interest paid on a LYON during such 12-month
period divided by (y) the
18
number of shares of common stock issuable upon conversion of a LYON
at the conversion rate in effect on the payment date of such
contingent interest. (Indenture, Section 11.08)
In the event that we pay a dividend or make a distribution on shares of
our common stock consisting of capital stock of, or similar equity interests
in, a subsidiary or other business unit of ours, the conversion rate will be
adjusted based on the market value of the securities so distributed relative to
the market value of our common stock, in each case based on the average sale
prices of those securities for the 10 trading days commencing on and including
the fifth trading day after the date on which "ex-dividend trading" commences
for such dividend or
distribution on the NYSE or such other national or regional exchange or market
on which the securities are then listed or quoted. (Indenture, Section 11.08)
In connection with any of the events in the second preceding paragraph,
or any consolidation, merger or binding share exchange involving Vishay,
transfer of Vishay's assets substantially as an entirety or liquidation or
dissolution of Vishay, we will mail to holders of the LYONs and file with the
trustee and the conversion agent a notice stating the proposed record date for
a dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, binding share exchange,
transfer, liquidation or dissolution. We will file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in
it shall not affect the validity of the transaction. (Indenture, Section 11.13)
No adjustment to the conversion rate or the ability of a holder of a LYON to
convert will be made if holders of LYONs will participate in the transaction
without conversion or in certain other cases. (Indenture, Section 11.10)
The indenture permits us to increase the conversion rate from time to
time. (Indenture, Section 11.12)
If we are party to a consolidation, merger or binding share exchange or a
transfer of all or substantially all of our assets, the right to convert a LYON
into common stock may be changed into a right to convert it into the kind and
amount of securities, cash or other assets of Vishay or another person which
the holder would have received if the holder had converted the holder's LYONs
immediately prior to the transaction. (Indenture, Section 11.14)
Holders of the LYONs may, in certain circumstances, be deemed to have
received a distribution subject to United States Federal income tax as a
dividend in the amount of:
. a taxable distribution to holders of shares of common stock which
results in an adjustment of the conversion rate; or
. an increase in the conversion rate at our discretion.
See "Certain United States Federal Income Tax Consequences--Constructive
Dividends."
CONTINGENT INTEREST
Subject to the accrual and record date provisions described below, we
will pay contingent interest to the holders of LYONs during any six-month
period from June 4 to December 3 and from December 4 to June 3, with the
initial six-month period commencing June 4, 2006, if the average market price
of a LYON for the five trading days ending on the third trading day immediately
preceding the first day of the applicable six-month period equals 120% or more
of the sum of the issue price and accrued original issue discount for such LYON
to the day immediately preceding the first day of the applicable six-month
period. See "--Redemption of LYONs at the Option of Vishay" for some of these
values. Notwithstanding the above, if we declare a dividend for which the
record date falls prior to the first day of a six-month period but the payment
date falls within such six-month period, then the five trading day period for
determining the average market price of a LYON will be the five trading days
ending on the third trading day immediately preceding such record date. (LYON,
Section 5)
The amount of contingent interest payable during any six-month period
will be the sum of any contingent interest payable in the first and second
three-month periods during such six-month period. During any
19
three-month period when contingent interest shall be payable, the contingent
interest payable per LYON for such period will be equal to the greater of (1)
0.0625% of the average market price of a LYON for the five trading day period
referred to in the immediately preceding paragraph and (2) the sum of all
regular cash dividends paid by us per share on our common stock during such
three-month period multiplied by the number of shares of common stock issuable
upon conversion of a LYON at the then applicable conversion rate. (LYON,
Section 5)
Contingent interest, if any, will be payable to holders of record of
LYONs as of the 15th day preceding the last day of the relevant six-month
period or, if we pay a regular cash dividend on our common stock during a
quarter within the relevant six-month period, to holders of LYONs as of the
record date for the related common stock dividend. We will make contingent
interest payments on the last day of the relevant six-month period or, if we
pay a regular cash dividend on our common stock during a quarter within the
relevant six-month period, on the payment date of the related common stock
dividend. The original issue discount will continue to accrue at the yield to
maturity whether or not contingent interest is paid. (LYON, Section 5) If we
fail to make a payment of contingent interest when due such unpaid interest
becomes "defaulted interest" under the indenture and accrues interest at a rate
of 3.0% per annum until paid. (LYON, Section 1)
Regular cash dividends are quarterly or other periodic cash dividends on
our common stock as declared by our board of directors as part of its cash
dividend payment practices and that are not designated by it as extraordinary
or special or other nonrecurring dividends. (LYON, Section 5) We do not
currently pay cash dividends on our capital stock. Our policy is to retain
earnings to support the growth of our business and we do not intend to change
this policy at the present time.
The market price of a LYON on any date of determination means the average
of the secondary market bid quotations per LYON obtained by the bid
solicitation agent for $10 million principal amount at maturity of LYONs at
approximately 4:00 p.m., New York City time, on such determination date from
three recognized securities dealers in the City of New York we select, provided
that if:
. at least three such bids are not obtained by the bid solicitation
agent; or
. in our reasonable judgment, the bid quotations are not indicative of
the secondary market value of the LYONs;
then the market price of the LYON will equal (a) the then applicable conversion
rate of the LYONs multiplied by (b) the market price of our common stock.
(LYON, Section 5)
The bid solicitation agent will initially be The Bank of New York. We may
change the bid solicitation agent, but the bid solicitation agent will not be
our affiliate. The bid solicitation agent will solicit bids from securities
dealers that are believed by us to be willing to bid for the LYONs. (LYON,
Section 5)
Upon determination that LYON holders will be entitled to receive
contingent interest which may become payable during a relevant six-month
period, on or prior to the start of such six-month period, we will issue a
press release and publish such information on our web site as soon as
practicable. (LYON, Section 3)
PURCHASE OF LYONS BY VISHAY AT THE OPTION OF THE HOLDER
On June 4, 2004, 2006, 2011 and 2016, holders may require us to purchase
any outstanding LYON for which the holder has properly delivered and not
withdrawn a written purchase notice, subject to certain additional conditions.
Holders may submit their LYONs for purchase to the paying agent at any time
from the opening of business on the date that is 20 business days prior to the
purchase date until the close of business on the business day immediately
preceding the purchase date.
The purchase price of a LYON will be:
. $ 602.77 per LYON on June 4, 2004;
20
. $ 639.76 per LYON on June 4, 2006;
. $ 742.47 per LYON on June 4, 2011; and
. $ 861.67 per LYON on June 4, 2016. (Indenture, Section 3.08)
The purchase prices shown above are equal to the issue price plus accrued
original issue discount to the purchase date. We may, at our option, elect to
pay the purchase price in cash, shares of common stock or any combination
thereof. (Indenture, Section 3.08) For a discussion of the tax treatment of a
holder receiving cash, shares of common stock or any combination thereof, see
"Certain United States Federal Income Tax Consequences--Sale, Exchange,
Conversion or Redemption."
We will be required to give notice on a date not less than 20 business
days prior to each purchase date to all holders at their addresses shown in the
register of the registrar, and to beneficial owners as required by applicable
law, stating among other things:
. whether we will pay the purchase price of LYONs in cash or common
stock or any combination thereof, specifying the percentages of each;
. if we elect to pay in common stock, the method of calculating the
market price of such common stock; and
. the procedures that holders must follow to require us to purchase
their LYONs. (Indenture, Section 3.08)
The purchase notice given by each holder electing to require us to
purchase LYONs shall be given to the paying agent no later than the close of
business on the business day immediately preceding the purchase date and must
state:
. the certificate numbers of the holder's LYONs to be delivered for
purchase;
. the portion of the principal amount at maturity of LYONs to be
purchased, which must be $1,000 or an integral multiple of $1,000;
. that the LYONs are to be purchased by us pursuant to the applicable
provisions of the LYONs; and
. in the event we elect, pursuant to the notice that we are required to
give, to pay the purchase price in common stock, in whole or in part,
but the purchase price is ultimately to be paid to the holder
entirely in cash because any of the conditions to payment of the
purchase price or portion of the purchase price in common stock is
not satisfied prior to the close of business on the purchase date, as
described below, whether the holder elects:
(1)to withdraw the purchase notice as to some or all of the LYONs to
which it relates; or
(2)to receive cash in such event in respect of the entire purchase
price for all LYONs or portions of LYONs subject to such purchase
notice.
If the holder fails to indicate the holder's choice with respect to the
election described in the final bullet point of the immediately preceding
paragraph, the holder shall be deemed to have elected to receive cash in
respect of the entire purchase price for all LYONs subject to the purchase
notice in these circumstances. (Indenture, Section 3.08)
A holder may withdraw any purchase notice by delivering a written notice
of withdrawal to the paying agent prior to the close of business on the
business day immediately preceding the purchase date. (Indenture, Section 3.10)
The notice of withdrawal shall state:
. the principal amount at maturity of the LYONs being withdrawn;
21
. the certificate numbers of the LYONs being withdrawn; and
. the principal amount at maturity, if any, of the LYONs that remain
subject to the purchase notice. (Indenture, Section 3.09)
If we elect to pay the purchase price, in whole or a specified
percentage, in shares of common stock, the number of shares of common stock to
be delivered by us shall be equal to the quotient obtained by dividing (i) the
amount of cash to which the holders would have been entitled had Vishay elected
to pay all or such specified percentage, as the case may be, of the purchase
price of such LYONs in cash by (ii) the market price of a share of common
stock, subject to certain conditions. (Indenture, Section 3.08)
We will pay cash based on the market price for all fractional shares of
common stock in the event we elect to deliver common stock in payment, in whole
or in part, of the purchase price.
The "market price" of our common stock means the average of the sale
prices of the common stock for the five trading day period ending on (if the
third business day prior to the applicable purchase date is a trading day or,
if not, then on the last trading day prior to) the third business day prior to
the applicable purchase date, appropriately adjusted to take into account the
occurrence, during the period commencing on the first of such trading days
during such five trading day period and ending on such purchase date, of
certain events that would result in an adjustment of the conversion rate with
respect to the common stock. (Indenture, Section 3.08)
The "sale price" of our common stock on any date means the closing per
share sale price (or if no closing sale price is reported, the average of the
bid and ask prices or, if more than one in either case, the average of the
average bid and the average ask prices) on such date as reported on the NYSE or
on such other principal national or regional securities exchange on which the
common stock is traded or, if the common stock is not listed on a national or
regional securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation System ("Nasdaq") or by the National
Quotation Bureau Incorporated. In the absence of a quotation, we will determine
the sale price on the basis of such quotations as we consider appropriate.
(Indenture, Section 1.01)
A "trading day" means a day during which trading in securities generally
occurs on the New York Stock Exchange (NYSE) or, if the common stock is not
listed on the NYSE, on the principal other national or regional securities
exchange on which the common stock is then listed or, if the common stock is
not listed on a national or regional securities exchange, on Nasdaq or, if the
common stock is not quoted on Nasdaq, on the principal other market on which
the common stock is then traded. (Indenture, Section 1.01)
Because the market price of the common stock is determined prior to the
applicable purchase date, holders of LYONs bear the market risk with respect to
the value of the common stock to be received from the date such market price is
determined to such purchase date. We may pay the purchase price or any portion
of the purchase price in common stock only if the information necessary to
calculate the market price is published in a daily newspaper of national
circulation or by other appropriate means. (Indenture, Section 3.08)
Upon determination of the actual number of shares of common stock to be
issued for each $1,000 principal amount at maturity of LYONs in accordance with
the foregoing provisions, we will issue a press release and publish such
information on our web site. (Indenture, Section 3.08)
In addition to the above conditions, our right to purchase LYONs, in
whole or in part, with common stock is subject to our satisfying various
conditions, including:
. listing such common stock on the principal national or regional
securities exchange on which our common stock is then listed or, if
not so listed, on Nasdaq;
. the registration of the common stock under the Securities Act and the
Exchange Act, if required; and
22
. any necessary qualification or registration under applicable state
securities law or the availability of an exemption from such
qualification and registration.
If these conditions are not satisfied with respect to a holder prior to
the close of business on the purchase date, we will be required to pay the
purchase price of the LYONs of the holder entirely in cash. We may not change
the form or components or percentages of components of consideration to be paid
for the LYONs once we have given the notice that we are required to give to
holders of LYONs, except as described in the first sentence of this paragraph.
(Indenture, Section 3.08)
In connection with any purchase offer, we will to the extent applicable:
. comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then be
applicable; and
. file a Schedule TO or any other required schedule under the Exchange
Act.
Our obligation to pay the purchase price for a LYON for which a purchase
notice has been delivered and not validly withdrawn is conditioned upon the
holder delivering the LYON, together with necessary endorsements, to the paying
agent at any time after delivery of the purchase notice. We will cause the
purchase price of the LYON to be paid promptly following the later of the
purchase date or the time of delivery of the LYON. (Indenture, Section 3.08)
If the paying agent holds money or securities sufficient to pay the
purchase price of the LYON on the business day following the purchase date in
accordance with the terms of the indenture, then, immediately after the
purchase date, the LYON will cease to be outstanding and original issue
discount on such LYON will cease to accrue, whether or not the LYON is
delivered to the paying agent. Thereafter, all other rights of the holder shall
terminate, other than the right to receive the purchase price upon delivery of
the LYON. (Indenture, Section 2.08)
We may not purchase any LYONs for cash at the option of holders if an
event of default with respect to the LYONs has occurred and is continuing,
other than a default in the payment of the purchase price with respect to such
LYONs. (Indenture, Section 3.10)
CHANGE IN CONTROL OR DELISTING EVENT PERMITS PURCHASE OF LYONS AT THE OPTION OF
THE HOLDER
In the event of any trigger event, which is defined as a change in
control or a delisting event (each term as defined below), occurring on or
prior to June 4, 2006, each holder will have the right, at its option, subject
to the terms and conditions of the indenture, to require us to purchase for
cash all or any portion of the holder's LYONs in integral multiples of $1,000
principal amount at maturity, at a price for each $1,000 principal amount at
maturity of such LYONs equal to the issue price plus accrued original issue
discount to the purchase date. We will be required to purchase the LYONs no
later than 35 business days after the occurrence of such trigger event. We
refer to this date in this prospectus as the "trigger event purchase date."
(Indenture, Section 3.09)
Within 15 business days after the occurrence of a trigger event, we must
mail to the trustee and to all holders of LYONs at their addresses shown in the
register of the registrar and to beneficial owners as required by applicable
law a notice regarding the applicable trigger event, which notice must state,
among other things:
. the events causing a trigger event;
. the date of such trigger event;
. the last date on which a holder may exercise the purchase right;
. the trigger event purchase price;
23
. the trigger event purchase date;
. the name and address of the paying agent and the conversion agent;
. the conversion rate and any adjustments to the conversion rate;
. that LYONs with respect to which a trigger event purchase notice is
given by the holder may be converted only if the trigger event
purchase notice has been withdrawn in accordance with the terms of
the indenture; and
. the procedures that holders must follow to exercise these rights.
(Indenture, Section 3.09)
To exercise this right, the holder must deliver a written notice so as to
be received by the paying agent no later than the close of business on the
business day immediately preceding the trigger event purchase date. The
required purchase notice upon the occurrence of a trigger event must state:
. the certificate numbers of the LYONs to be delivered by the holder;
. the portion of the principal amount at maturity of LYONs to be
purchased, which portion must be $1,000 or an integral multiple of
$1,000; and
. that we are to purchase such LYONs pursuant to the applicable
provisions of the LYONs and of the indenture governing the LYONs.
(Indenture, Section 3.09)
A holder may withdraw any trigger event purchase notice by delivering to
the paying agent a written notice of withdrawal prior to the close of business
on the business day immediately preceding the trigger event purchase date. The
notice of withdrawal must state:
. the principal amount at maturity of the LYONs being withdrawn;
. the certificate numbers of the LYONs being withdrawn; and
. the principal amount at maturity, if any, of the LYONs that remain
subject to a trigger event purchase notice. (Indenture, Section 3.10)
Our obligation to pay the trigger event purchase price for a LYON for
which a trigger event purchase notice has been delivered and not validly
withdrawn is conditioned upon delivery of the LYON, together with necessary
endorsements, to the paying agent at any time after the delivery of such
trigger event purchase notice. We will cause the trigger event purchase price
for such LYON to be paid promptly following the later of the trigger event
purchase date or the time of delivery of such LYON. (Indenture, Section 3.09)
If the paying agent holds money sufficient to pay the trigger event
purchase price of the LYON on the trigger event purchase date in accordance
with the terms of the indenture, then, immediately after the trigger event
purchase date, original issue discount on such LYON will cease to accrue,
whether or not the LYON is delivered to the paying agent. Thereafter, all other
rights of the holder shall terminate, other than the right to receive the
trigger event purchase price upon delivery of the LYON. (Indenture, Section
3.11)
Under the indenture, a "change in control" is deemed to have occurred at
such time as:
. any person or group, other than Vishay, its subsidiaries, their
employee benefit plans or permitted holders, files a Schedule 13D or
Schedule TO (or any successor schedule, form or report under the
Exchange Act) disclosing that such person has become the beneficial
owner of 50% or more, in the aggregate, of the voting power of
Vishay's common stock and Class B common stock or other capital stock
into which the common stock or Class B common stock is reclassified
or changed, with certain exceptions;
. permitted holders file a Schedule 13D or Schedule TO (or any
successor schedule, form or report under the Exchange Act) disclosing
that such persons have become the beneficial owners of 80%
24
or more, in the aggregate, of the voting power of Vishay's common
stock and Class B common stock or other capital stock into which the
common stock or Class B common stock is reclassified or changed, with
certain exceptions; or
. there shall be consummated any share exchange, consolidation or
merger of Vishay pursuant to which its voting shares of common stock
and the Class B common stock would be converted into cash, securities
or other property, in each case other than a share exchange,
consolidation or merger in which the holders of such voting capital
stock immediately prior to the share exchange, consolidation or
merger have, directly or indirectly, at least a majority of the total
voting power in the aggregate of all classes of capital stock of the
continuing or surviving corporation immediately after the share
exchange, consolidation or merger. (Indenture, Section 3.09)
For purposes of this section,
. a "permitted holder" means each of Dr. Felix Zandman and Mrs. Louella
B. Slaner or their spouses, children or lineal descendants, any trust
established for the benefit of such persons, or any "person" (as such
term is used in Section 13(d) or 14(d) of the Exchange Act), directly
or indirectly, controlled, controlled by or under common control with
any such person mentioned in this paragraph or any trust established
for the benefit of such persons or any charitable trust or non-profit
entity established by a permitted holder, or any group in which such
permitted holders hold more than a majority of the voting power of
the common stock and Class B common stock deemed to be beneficially
owned by such group;
. the term "group" includes any group acting for the purpose of
acquiring, holding or disposing of securities with the meaning of
Rule 13d-5(b)(1) under the Exchange Act or any successor provision;
and
. the term "beneficial owner" is determined in accordance with Rules
13d-3 and 13d-5 under the Exchange Act or any successor provision,
except that a person will be deemed to have beneficial ownership of
all shares that such person has the right to acquire irrespective of
whether that right is exercisable immediately or only after the
passage of time. (Indenture, Section 3.09)
Under the indenture, a "delisting event" occurs if Vishay, together with
its affiliates, acquires a sufficient amount of Vishay common stock to result
in the common stock being delisted from the NYSE or principal United States
national or regional securities exchange or national quotation system on which
the shares of common stock are then listed or traded. (Indenture, Section 3.09)
In connection with any purchase offer in the event of the occurrence of a
trigger event, we will to the extent applicable:
. comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act which may then be
applicable; and
. file a Schedule TO or any other required schedule under the Exchange
Act.
The trigger event purchase feature of the LYONs may in certain
circumstances make more difficult or discourage a takeover of Vishay. The
trigger event purchase feature, however, is not the result of our knowledge of
any specific effort:
. to accumulate shares of our common stock;
. to obtain control of Vishay by means of a merger, tender offer,
solicitation or otherwise; or
. part of a plan by management to adopt a series of anti-takeover
provisions.
25
Instead, the trigger event purchase feature is a standard term contained
in other LYONs offerings that have been marketed by Merrill Lynch. The terms of
the trigger event purchase feature resulted from negotiations between Merrill
Lynch and us.
We could, in the future, enter into certain transactions, including
certain recapitalizations, that would not constitute a trigger event with
respect to the trigger event purchase feature of the LYONs but that would
increase the amount of our (or our subsidiaries') outstanding indebtedness.
We may not purchase LYONs at the option of holders upon the occurrence of
a trigger event if there has occurred and is continuing an event of default
with respect to the LYONs, other than a default in the payment of the trigger
event purchase price with respect to the LYONs. (Indenture, Section 3.10)
REDEMPTION OF LYONS AT THE OPTION OF VISHAY
No sinking fund is provided for the LYONs. Prior to June 4, 2006, we
cannot redeem the LYONs at our option. Beginning on June 4, 2006, we may redeem
the LYONs for cash as a whole at any time, or in part from time to time. We
will give not less than 30 days nor more than 60 days notice of redemption by
mail to holders of the LYONs. (Indenture, Section 3.03)
The table below shows redemption prices of a LYON on June 4, 2006, at
each June 4 thereafter prior to maturity and at stated maturity on June 4,
2021. These prices reflect the issue price plus accrued original issue discount
to the redemption date. The redemption price of a LYON redeemed between such
dates would include an additional amount reflecting the additional original
issue discount accrued since the next preceding date in the table.
(1) (2) (3)
ACCRUED ORIGINAL REDEMPTION PRICE
REDEMPTION DATE LYON ISSUE PRICE ISSUE DISCOUNT (1) + (2)
--------------- ---------------- ---------------- ----------------
June 4, 2006...... $551.26 $ 88.50 $ 639.76
June 4, 2007...... 551.26 107.84 659.10
June 4, 2008...... 551.26 127.76 679.02
June 4, 2009...... 551.26 148.28 699.54
June 4, 2010...... 551.26 169.43 720.69
June 4, 2011...... 551.26 191.21 742.47
June 4, 2012...... 551.26 213.65 764.91
June 4, 2013...... 551.26 236.77 788.03
June 4, 2014...... 551.26 260.59 811.85
June 4, 2015...... 551.26 285.13 836.39
June 4, 2016...... 551.26 310.41 861.67
June 4, 2017...... 551.26 336.45 887.71
June 4, 2018...... 551.26 363.28 914.54
June 4, 2019...... 551.26 390.92 942.18
June 4, 2020...... 551.26 419.40 970.66
At stated maturity 551.26 448.74 1,000.00
(LYON, Section 6)
If we redeem less than all of the outstanding LYONs, the trustee will
select the LYONs to be redeemed on a pro rata basis in principal amounts at
maturity of $1,000 or integral multiples of $1,000 by lot, pro rata based on
the ownership thereof, or by any other method the trustee considers fair and
appropriate. If a portion of a holder's LYONs is selected for partial
redemption and the holder converts a portion of the LYONs, the converted
portion will be deemed to be the portion selected for redemption. (Indenture
Section 3.02)
26
EVENTS OF DEFAULT
The following are events of default for the LYONs:
(1) default in payment when due of any contingent interest which default
continues for 30 days;
(2) a default in the payment of the principal amount at maturity, issue
price, accrued original issue discount, redemption price, purchase
price or trigger event purchase price on any security when the same
becomes due and payable at stated maturity, upon redemption, upon
declaration, when due for purchase or otherwise (whether or not any
such payment shall be prohibited by the terms of the indenture
governing the LYONs);
(3) failure by us to deliver shares of common stock (or to pay cash in
lieu of fractional shares) in accordance with the terms of the
indenture when such common stock (or cash in lieu of fractional
shares) is required to be delivered, upon conversion of a LYON and
such failure is not remedied for a period of 10 days;
(4) failure by us to comply with any of the other agreements in the LYONs
or the indenture (other than those referred to in clauses (1), (2)
and (3) above) upon receipt by us of notice of such default by the
trustee or by holders of not less than 25% in aggregate principal
amount at maturity of the LYONs then outstanding and the failure to
cure (or obtain a waiver of) such default within 60 days after
receipt of such notice;
(5) (A) failure by us to make any payment by the end of any applicable
grace period after maturity of indebtedness, which term as used in
the indenture means obligations (other than nonrecourse obligations)
of ours for borrowed money or evidenced by bonds, debentures, notes
or similar instruments in an amount (taken together with amounts in
(B)) in excess of $10 million and continuance of such failure, or (B)
the acceleration of indebtedness in an amount (taken together with
the amounts in (A)) in excess of $10 million because of a default
with respect to such indebtedness without such indebtedness having
been discharged or such acceleration having been cured, waived,
rescinded or annulled in case of (A) or (B) above, for a period of 30
days after written notice to us by the trustee or to us and the
trustee by the holders of not less than 25% in aggregate principal
amount at maturity of the LYONs then outstanding. However, if any
such failure or acceleration referred to in (A) or (B) above shall
cease to exist or be cured, waived, rescinded or annulled, then the
event of default by reason thereof shall be deemed not to have
occurred; or
(6) certain events of bankruptcy or insolvency affecting us or our
material subsidiaries. (Indenture, Section 6.01)
A "material subsidiary" means a subsidiary of Vishay, including such
subsidiary's subsidiaries, which meets any of the following conditions:
. Vishay and its other subsidiaries' investments in and advances to
such subsidiary exceed five percent of the total assets of Vishay and
its subsidiaries consolidated as of the end of the most recently
completed fiscal year; or
. Vishay and its other subsidiaries' proportionate share of the total
assets (after intercompany eliminations) of such subsidiary exceeds
five percent of the total assets of Vishay and its subsidiaries
consolidated as of the end of the most recently completed fiscal
year; or
. Vishay and its other subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of such
subsidiary exceeds five percent of such income of Vishay and its
subsidiaries consolidated as of the end of the most recently
completed fiscal year.
27
If an event of default shall have happened and be continuing, either the
trustee or the holders of not less than 25% in aggregate principal amount at
maturity of the LYONs then outstanding may declare the issue price of the LYONs
plus the original issue discount on the LYONs accrued through the date of such
declaration, and any accrued and unpaid contingent interest and interest on any
defaulted interest through the date of such declaration, to be immediately due
and payable. In the case of certain events of bankruptcy or insolvency of
Vishay or its material subsidiaries, the issue price of the LYONs plus the
original issue discount and any contingent interest accrued thereon through the
occurrence of such event shall automatically become and be immediately due and
payable. (Indenture, Section 6.02) Upon any such acceleration, the
subordination provisions of the indenture preclude any payment being made to
holders of LYONs until the earlier of (i) 120 days or more after the date of
such acceleration and (ii) the payment in full of all senior indebtedness, but
only if such payment is then otherwise permitted under the terms of the
indenture. See "--Subordination of LYONs" above. (Indenture, Section 10.03)
Under certain circumstances, the holders of a majority in aggregate principal
amount at maturity of the outstanding LYONs may rescind any such acceleration
with respect to the LYONs and the consequences of such acceleration.
(Indenture, Section 6.02) Interest shall accrue and be payable on demand upon a
default in the payment of principal amount at maturity, issue price, accrued
original issue discount, redemption price, purchase price, trigger event
purchase price or shares of common stock (and cash in lieu of fractional
shares) on the overdue amount at the rate of 3.0% compounded semi-annually, in
each case to the extent that the payment of such interest shall be legally
enforceable. (LYON, Section 1)
The trustee shall, within 90 days after the occurrence of any default,
mail to all holders notice of all defaults of which the trustee is aware,
unless such defaults shall have been cured or waived before the giving of such
notice; provided, that the trustee may withhold such notice as to any default
other than a payment default, if it determines in good faith that withholding
the notice is in the interests of the holders. (Indenture, Section 7.05)
The holders of a majority in aggregate principal amount at maturity of
the outstanding LYONs may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee, provided that such direction shall not be in
conflict with any law or the indenture and subject to certain other
limitations. (Indenture, Section 6.05) The trustee may refuse to perform any
duty or exercise any right or power or extend or risk its own funds or
otherwise incur any financial liability unless it receives indemnity
satisfactory to it against any loss, liability or expense. (Indenture, Section
7.01(e)) No holder will have any right to pursue any remedy with respect to the
indenture or the LYONs, unless (i) such holder shall have previously given the
trustee written notice of a continuing event of default; (ii) the holders of at
least 25% in aggregate principal amount at maturity of the outstanding LYONs
shall have made a written request to the trustee to pursue such remedy; (iii)
such holder or holders shall have offered to the trustee reasonable security or
indemnity against any loss, liability or expense satisfactory to it; (iv) the
trustee shall have failed to comply with the request within 60 days after
receipt of such notice, request and offer of security or indemnity; and (v) the
holders of a majority in aggregate principal amount at maturity of the
outstanding LYONS shall not have given the trustee a direction inconsistent
with such request within 60 days after receipt of such request. (Indenture,
Section 6.06)
The right of any holder: (a) to receive payment of the principal amount
at maturity, issue price, accrued original issue discount, redemption price,
purchase price, trigger event purchase price or shares of common stock (and
cash in lieu of fractional shares), in respect of the LYONs held by such holder
on or after the respective due dates expressed in the LYONs or as of any
redemption date or (b) to bring suit for the enforcement of any such payment on
or after such respective dates or the right to convert shall not be impaired or
adversely affected without such holder's consent. (Indenture, Section 6.07)
The holders of a majority in aggregate principal amount at maturity of
LYONs at the time outstanding may waive any existing default and its
consequences except (i) any default in any payment on the LYONs, (ii) any
default with respect to the conversion rights of the LYONs, or (iii) any
default in respect of certain covenants or provisions in the indenture which
may not be modified without the consent of each holder of LYONs as
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described in "--Modification" below. When a default is waived, it is deemed
cured and shall cease to exist, but no such waiver shall extend to any
subsequent or other default or impair any consequent right. (Indenture, Section
6.04)
We will be required to furnish to the trustee annually a statement as to
any default by us in the performance and observance of our obligations under
the indenture. In addition, we will file with the trustee written notice of the
occurrence or any default or event of default within five business days of our
becoming aware of such default or event of default. (Indenture, Section 6.01)
MERGER AND SALES OF ASSETS
The indenture provides that Vishay may not consolidate with or merge with
or into any other person or convey, transfer or lease its properties and assets
substantially as an entirety to another person, unless among other conditions:
. the resulting, surviving or transferee person is a corporation
organized and existing under the laws of the United States, any state
thereof or the District of Columbia;
. such person assumes all obligations of Vishay with respect to the
LYONs and under the indenture; and
. Vishay or such successor person shall not immediately thereafter be
in default under the indenture.
Upon the assumption of Vishay's obligations by such a person in such
circumstances, subject to certain exceptions, Vishay shall be discharged from
all obligations with respect to the LYONs and under the indenture. (Indenture,
Section 5.01) Although such transactions are permitted under the indenture,
certain of the foregoing transactions occurring on or prior to June 4, 2006
could constitute a change in control or a delisting event permitting each
holder to require Vishay to purchase the LYONs of such holder as described
above.
MODIFICATION
We and the trustee may enter into supplemental indentures that add,
change or eliminate provisions of the indenture or modify the rights of the
holders of the LYONs with the consent of the holders of at least a majority in
principal amount at maturity of the LYONs then outstanding.
However, without the consent of each holder, no supplemental indenture
may, among other actions:
. alter the manner of calculation or rate of accrual of original issue
discount or contingent interest on any LYON or extend the time of
payment;
. make any LYON payable in money or securities other than that stated
in such LYON;
. change the stated maturity of any LYON;
. reduce the principal amount at maturity, accrued original issue
discount, redemption price, purchase price or trigger event purchase
price with respect to any LYON;
. make any change that adversely affects the right of a holder to
convert any LYON;
. make any change that adversely affects the right to require us to
purchase a LYON;
. impair the right to institute suit for the enforcement of any payment
with respect to, or conversion of, the LYONs; or
. change the provisions in the indenture that relate to modifying or
amending the indenture. (Indenture, Section 9.08)
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Without the consent of any holder of LYONs, we and the trustee may enter
into supplemental indentures for any of the following purposes:
. to evidence a successor to us and the assumption by that successor of
our obligations under the indenture and the LYONs;
. to add to our covenants for the benefit of the holders of the LYONs
or to surrender any right or power conferred upon us;
. to make any changes or modifications to the indenture necessary in
connection with the registration of the LYONs under the Securities
Act and the qualification of the LYONs under the Trust Indenture Act
as contemplated by the indenture;
. to cure any ambiguity or inconsistency in the indenture; and
. to make any change that does not affect the rights of the holders of
the LYONs in an adverse manner. (Indenture, Section 9.01)
No modification to the LYONs or the indenture may make any change that
adversely affects the rights of any holder of senior indebtedness then
outstanding unless the requisite holders of such senior indebtedness consent to
such change pursuant to the terms of such senior indebtedness. (Indenture,
Section 9.01)
DISCHARGE OF THE INDENTURE
We may satisfy and discharge our obligations under the indenture by
delivering to the trustee for cancellation all outstanding LYONs or by
depositing with the trustee, the paying agent or the conversion agent, if
applicable, after the LYONs have become due and payable, whether at stated
maturity, any redemption date, any purchase date, a trigger event purchase
date, or upon conversion or otherwise, cash or shares of common stock (as
applicable under the terms of the indenture) sufficient to pay all of the
outstanding LYONs and paying all other sums payable under the indenture.
(Indenture, Section 8.01)
CALCULATIONS IN RESPECT OF LYONS
We will be responsible for making all calculations called for under the
LYONs (other than the LYON market price). These calculations include, but are
not limited to, determination of our common stock and amounts of contingent
interest payments, if any, payable on the LYONs. We will make all these
calculations in good faith and, absent manifest error, our calculations will be
final and binding on all holders of LYONs. We will provide a schedule of our
calculations to the trustee, and the trustee is entitled to rely upon the
accuracy of our calculations without independent verification. (Indenture,
Section 13.08)
LIMITATIONS OF CLAIMS IN BANKRUPTCY
If a bankruptcy proceeding is commenced in respect of Vishay, the claim
of the holder of a LYON is, under Title 11 of the United States Code, limited
to the issue price of the LYON plus that portion of the original issue discount
that has accrued from the date of issue to the commencement of the proceeding.
GOVERNING LAW
The indenture and the LYONs will be governed by, and construed in
accordance with, the law of the State of New York. (Indenture, Section 13.10)
TRUSTEE
The Bank of New York is initially the trustee, registrar, paying agent
and conversion agent under the indenture for the LYONs.
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BOOK-ENTRY SYSTEM
The LYONs have been issued only in the form of global securities held in
book-entry form. DTC or its nominee is the sole registered holder of the LYONs
for all purposes under the indenture. Owners of beneficial interests in the
LYONs represented by the global securities hold their interests pursuant to the
procedures and practices of DTC. (Indenture, Section 2.01(a)) As a result,
beneficial interests in any such securities are shown on, and transfers are
effected only through, records maintained by DTC and its direct and indirect
participants and any such interest may not be exchanged for certificated
securities, except in the limited circumstances described under "--Exchange of
Global Securities."
Unless and until LYONs are exchanged for certificated securities as
described in the next section (and then except to the extent they have been so
exchanged), the procedures described in this prospectus, the LYONs and the
indenture relating to the conversion of LYONs, the surrender of LYONs for
repurchase or payment, identification of LYONs by certificate number and
similar matters will be relevant only to DTC as the registered holder.
(Indenture, Section 2.06(b))
Owners of beneficial interests will be required to follow such procedures
as DTC (or its direct and indirect participants) may establish for exercising
rights under or in respect of their interests, including conversion or
repurchase rights. Beneficial owners will not be holders and will not be
entitled to any direct rights provided to the holders of LYONs under the global
securities or the indenture. Vishay and the trustee, and any of their
respective agents, will treat DTC as the sole holder and registered owner of
the global securities. (Indenture, Section 2.02)
EXCHANGE OF GLOBAL SECURITIES
We will exchange LYONs represented by global securities in book-entry
form for certificated securities with the same terms (and the holders thereof
will then be required to follow the procedures established in the LYONs and the
indenture for converting, requiring repurchase or otherwise dealing with the
LYONs) only if:
. DTC is unwilling or unable to continue as depositary or DTC ceases to
be a clearing agency registered under the Exchange Act and a
successor depositary is not appointed by us within 90 days; or
. we decide to discontinue use of the system of book-entry transfer
through DTC (or any successor depositary).
If an event of default under the indenture occurs and is continuing then
DTC may, at its discretion, exchange LYONs for global securities. (Indenture,
Section 2.12)
ABOUT DTC
DTC has advised us as follows: DTC is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act.
DTC facilitates the settlement of transactions among its participants
through electronic computerized book-entry changes in participants' accounts,
eliminating the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and other organizations, some of whom and/or their
representatives own DTC. Access to DTC's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
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DESCRIPTION OF CAPITAL STOCK
The aggregate number of shares of capital stock which Vishay has
authority to issue is 341,000,000 shares: 1,000,000 shares of preferred stock,
par value $1.00 per share, 300,000,000 shares of common stock, par value $.10
per share and 40,000,000 shares of Class B common stock, par value $.10 per
share. No shares of preferred stock have been issued. At November 16, 2001,
there were 143,764,559 shares of common stock and 15,496,634 shares of Class B
common stock outstanding.
After any required payment on shares of preferred stock, holders of
common stock and Class B common stock are entitled to receive, and share
ratably on a per share basis, all dividends and other distributions declared by
the board of directors of Vishay. In the event of a stock dividend or stock
split, holders of common stock will receive shares of common stock and holders
of Class B common stock will receive shares of Class B common stock. Neither
the common stock nor the Class B common stock may be split, divided or combined
unless the other is split, divided or combined equally.
The holders of common stock are entitled to one vote for each share held.
Holders of Class B common stock are entitled to 10 votes for each share held.
The common stock and the Class B common stock vote together as one class on all
matters subject to stockholder approval, except as set forth in the following
sentence. The approval of the holders of common stock and of Class B common
stock, each voting separately as a class, is required to authorize issuances of
additional shares of Class B common stock other than in connection with stock
splits and stock dividends.
Shares of Class B common stock are convertible into shares of common
stock on a one-for-one basis at any time at the option of the holder thereof.
The Class B common stock is not transferable except to the holder's spouse,
certain of such holder's relatives, certain trusts established for the benefit
of the holder, the holder's spouse or relatives, corporations and partnerships
beneficially owned and controlled by such holder, such holder's spouse or
relatives, charitable organizations and such holder's estate. Upon any transfer
made in violation of those restrictions, shares of Class B common stock will be
automatically converted into shares of common stock on a one-for-one basis.
Neither the holders of common stock nor the holders of Class B common
stock have any preemptive rights to subscribe for additional shares of capital
stock of Vishay.
The common stock is listed on the NYSE. There is no public market for
shares of Vishay's Class B common stock. All outstanding shares of common stock
and Class B common stock are, and upon conversion, the shares of common stock
issuable upon conversion of the LYONs will be, validly issued, fully paid and
non-assessable.
Vishay furnishes to its stockholders annual reports containing financial
statements certified by an independent public accounting firm. In addition,
Vishay furnishes to its stockholders quarterly reports containing unaudited
financial information for each of the first three quarters of each year.
American Stock Transfer & Trust Company is the transfer agent and
registrar of Vishay's common stock and Class B common stock.
32
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Set forth in full below is the opinion of Kramer Levin Naftalis & Frankel
LLP, our counsel, as to certain United States Federal income tax consequences
of the purchase, ownership and disposition of the LYONs. This opinion is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including retroactive changes in effective dates) or
possible differing interpretations. The discussion below deals only with LYONs
held as capital assets and does not purport to deal with persons in special tax
situations, such as financial institutions, insurance companies, regulated
investment companies, dealers in securities or currencies, tax-exempt entities,
persons holding LYONs in a tax-deferred or tax-advantaged account, or persons
holding LYONs as a hedge against currency risks, as a position in a "straddle"
or as part of a "hedging" or "conversion" transaction for tax purposes. Persons
considering the purchase of the LYONs should consult their own tax advisors
concerning the application of the United States Federal income tax laws to
their particular situations as well as any consequences of the purchase,
ownership and disposition of the LYONs arising under the laws of any other
taxing jurisdiction.
We do not address all of the tax consequences that may be relevant to a
U.S. Holder (as defined below). In addition, the following discussion does not
discuss all the tax consequences that might be relevant to Non-U.S. Holders.
Moreover, in order to protect ourselves from adverse tax consequences, Non-U.S.
Holders will be subject to withholding on payments of contingent interest on
the LYONs held by such Non-U.S. Holders at a rate of 30%, subject to reduction
by an applicable treaty or upon the receipt of a Form W-8ECI from a Non-U.S.
Holder claiming that the payments are effectively connected with the conduct of
a United States trade or business. In determining a holder's status, the United
States entity otherwise required to withhold taxes may rely on appropriate
certification of the holder's non-foreign status signed under penalty of
perjury. Further, we do not address:
. the United States Federal income tax consequences to shareholders in,
or partners or beneficiaries of, an entity that is a holder of LYONs;
. the United States Federal estate, gift or alternative minimum tax
consequences of the purchase, ownership or disposition of LYONs;
. persons who hold the LYONs whose functional currency is not the
United States dollar;
. any state, local or foreign tax consequences of the purchase,
ownership or disposition of LYONs; or
. any Federal, state, local or foreign tax consequences of owning or
disposing of the common stock.
Accordingly, you should consult your own tax advisor regarding the tax
consequences of purchasing, owning and disposing of the LYONs and the common
stock in light of your own circumstances.
A U.S. Holder is a beneficial owner of the LYONs who or which is:
. a citizen or individual resident of the United States, as defined in
Section 7701(b) of the Internal Revenue Code of 1986, as amended
(which we refer to as the Code);
. a corporation or partnership, including any entity treated as a
corporation or partnership for United States Federal income tax
purposes, created or organized in or under the laws of the United
States, any state thereof or the District of Columbia unless, in the
case of a partnership, Treasury regulations are enacted that provide
otherwise;
. an estate if its income is subject to United States Federal income
taxation regardless of its source; or
33
. a trust if (1) a United States court can exercise primary supervision
over its administration and (2) one or more United States persons
have the authority to control all of its substantial decisions.
Notwithstanding the preceding sentence, certain trusts in existence on
August 20, 1996, and treated as a U.S. Holder prior to such date, may also be
treated as U.S. Holders.
A Non-U.S. Holder is a holder of LYONs other than a U.S. Holder. We urge
prospective investors that are Non-U.S. Holders to consult their own tax
advisors regarding the United States Federal income tax consequences of an
investment in the LYONs, including the application of United States withholding
taxes.
No statutory, administrative or judicial authority directly addresses the
treatment of the LYONs or instruments similar to the LYONs for United States
Federal income tax purposes. No rulings have been sought or are expected to be
sought from the Internal Revenue Service (which we refer to as the IRS) with
respect to any of the United States Federal income tax consequences discussed
below, and no assurance can be given that the IRS will not take contrary
positions. As a result, no assurance can be given that the IRS will agree with
the tax characterizations and the tax consequences described below.
We urge prospective investors to consult their own tax advisors with
respect to the tax consequences to them of the purchase, ownership and
disposition of the LYONs and the common stock in light of their own particular
circumstances, including the tax consequences under state, local, foreign and
other tax laws and the possible effects of changes in United States Federal or
other tax laws.
CLASSIFICATION OF THE LYONS
We have received an opinion from our counsel Kramer Levin Naftalis &
Frankel LLP, that the LYONs will be treated as indebtedness for United States
Federal income tax purposes and that the LYONs will be subject to the special
regulations governing contingent payment debt instruments (which we refer to as
the CPDI regulations).
ACCRUAL OF INTEREST ON THE LYONS
Pursuant to the terms of the indenture, we and each holder of the LYONs
agree, for United States Federal income tax purposes, to treat the LYONs as
debt instruments that are subject to the CPDI regulations. Pursuant to these
regulations, U.S. Holders of the LYONs will be required to accrue interest
income on the LYONs, in the amounts described below, regardless of whether the
U.S. Holder uses the cash or accrual method of tax accounting. Accordingly,
U.S. Holders will be required to include interest in taxable income in each
year in excess of the accruals on the LYONs for non-tax purposes and in excess
of any contingent interest payments actually received in that year.
The CPDI regulations provide that a U.S. Holder must accrue an amount of
ordinary interest income, as original issue discount for United States Federal
income tax purposes, for each accrual period prior to and including the
maturity date of the LYONs that equals:
(1)the product of (i) the adjusted issue price (as defined below) of the
LYONs as of the beginning of the accrual period; and (ii) the
comparable yield to maturity (as defined below) of the LYONs,
adjusted for the length of the accrual period;
(2)divided by the number of days in the accrual period; and
(3)multiplied by the number of days during the accrual period that the
U.S. Holder held the LYONs.
A LYON's issue price is the first price to the public at which a
substantial amount of the LYONs is sold to the public, excluding sales to bond
houses, brokers or similar persons or organizations acting in the capacity of
34
underwriters, placement agents or wholesalers. The adjusted issue price of a
LYON is its issue price increased by any interest income previously accrued,
determined without regard to any adjustments to interest accruals described
below, and decreased by the projected amount of any payments previously made
with respect to the LYONs.
Kramer Levin Naftalis & Frankel LLP, our counsel, has advised us that the
term "comparable yield" means the annual yield we would pay, as of the initial
issue date, on a fixed-rate nonconvertible debt security with no contingent
payments, but with terms and conditions otherwise comparable to those of the
LYONs. Based in part on that advice, we intend to take the position that the
comparable yield for the LYONs is 9.28% compounded semiannually. The precise
manner of calculating the comparable yield is not absolutely clear.
The CPDI regulations require that we provide to U.S. Holders, solely for
United States Federal income tax purposes, a schedule of the projected amounts
of payments, which we refer to as projected payments, on the LYONs. This
schedule must produce the comparable yield. The projected payment schedule
includes estimates for certain payments of contingent interest and an estimate
for a payment at maturity taking into account the conversion feature.
The comparable yield and the schedule of projected payments is set forth
in the indenture. U.S. Holders may also obtain the projected payment schedule
by submitting a written request for such information to: Vishay
Intertechnology, Inc., 63 Lincoln Highway, Malvern, Pennsylvania 19355-2120,
(610) 644-1300, Attention: Investor Relations.
For United States Federal income tax purposes, a U.S. Holder must use the
comparable yield and the schedule of projected payments in determining its
interest accruals, and the adjustments thereto described below, in respect of
the LYONs, unless such U.S. Holder timely discloses and justifies the use of
other estimates to the IRS. A U.S. Holder that determines its own comparable
yield or schedule of projected payments must also establish that our comparable
yield or schedule of projected payments is unreasonable.
The comparable yield and the schedule of projected payments are not
determined for any purpose other than for the determination of a U.S. Holder's
interest accruals and adjustments thereof in respect of the LYONs for United
States Federal income tax purposes and do not constitute a projection or
representation regarding the actual amounts payable on the LYONs.
Amounts treated as interest under the CPDI regulations are treated as
original issue discount for all purposes of the Code.
ADJUSTMENTS TO INTEREST ACCRUALS ON THE LYONS
If, during any taxable year, a U.S. Holder receives actual payments with
respect to the LYONs for that taxable year that in the aggregate exceed the
total amount of projected payments for that taxable year, the U.S. Holder will
incur a "net positive adjustment" under the CPDI regulations equal to the
amount of such excess. The U.S. Holder will treat a "net positive adjustment"
as additional interest income for the taxable year. For this purpose, the
payments in a taxable year include the fair market value of property received
in that year.
If a U.S. Holder receives in a taxable year actual payments with respect
to the LYONs for that taxable year that in the aggregate were less than the
amount of projected payments for that taxable year, the U.S. Holder will incur
a "net negative adjustment" under the CPDI regulations equal to the amount of
such deficit. This adjustment will (a) reduce the U.S. Holder's interest income
on the LYONs for that taxable year, and (b) to the extent of any excess after
the application of (a), give rise to an ordinary loss to the extent of the U.S.
Holder's interest income on the LYONs during prior taxable years, reduced to
the extent such interest was offset by prior net negative adjustments.
35
If a U.S. Holder purchases LYONs at a discount or premium to the adjusted
issue price, the discount will be treated as a positive adjustment and the
premium will be treated as a negative adjustment. The U.S. Holder must
reasonably allocate the adjustment over the remaining term of the LYONs by
reference to the accruals of original issue discount at the comparable yield or
to the projected payments. It may be reasonable to allocate the adjustment over
the remaining term of the LYONs pro rata with the accruals of original issue
discount at the comparable yield. You should consult your tax advisors
regarding these allocations.
SALE, EXCHANGE, CONVERSION OR REDEMPTION
Generally, the sale or exchange of a LYON, or the redemption of a LYON
for cash, will result in taxable gain or loss to a U.S. Holder. As described
above, our calculation of the comparable yield and the schedule of projected
payments for the LYONs, includes the receipt of stock upon conversion as a
contingent payment with respect to the LYONs. Accordingly, we intend to treat
the receipt of our common stock by a U.S. Holder upon the conversion of a LYON,
or upon the redemption of a LYON where we elect to pay in common stock, as a
contingent payment under the CPDI regulations. As described above, holders are
generally bound by our determination of the comparable yield and the schedule
of projected payments. Under this treatment, a conversion or such a redemption
will also result in taxable gain or loss to a U.S. Holder. The amount of gain
or loss on a taxable sale, exchange, conversion or redemption will be equal to
the difference between (a) the amount of cash plus the fair market value of any
other property received by the U.S. Holder, including the fair market value of
any of our common stock received, and (b) the U.S. Holder's adjusted tax basis
in the LYON. A U.S. Holder's adjusted tax basis in a LYON on any date will
generally be equal to the U.S. Holder's original purchase price for the LYON,
increased by any interest income previously accrued by the U.S. Holder
(determined without regard to any adjustments to interest accruals described
above), and decreased by the amount of any projected payments, as defined
above, projected to have been made through such date. Gain recognized upon a
sale, exchange, conversion or redemption of a LYON will generally be treated as
ordinary interest income; any loss will be ordinary loss to the extent of
interest previously included in income, and thereafter, capital loss (which
will be long-term if the LYON is held for more than one year). The
deductibility of net capital losses by individuals and corporations is subject
to limitations.
A U.S. Holder's tax basis in our common stock received upon a conversion
of a LYON or upon a U.S. Holder's exercise of a put right that we elect to pay
in common stock will equal the then current fair market value of such common
stock. The U.S. Holder's holding period for the common stock received will
commence on the day immediately following the date of conversion or redemption.
CONSTRUCTIVE DIVIDENDS
If at any time we make a distribution of property to our stockholders
that would be taxable to the stockholders as a dividend for Federal income tax
purposes and, in accordance with the anti-dilution provisions of the LYONs, the
conversion rate of the LYONs is increased, such increase may be deemed to be
the payment of a taxable dividend to holders of the LYONs.
For example, an increase in the conversion rate in the event of
distributions of our evidences of indebtedness or our assets or an increase in
the event of an extraordinary cash dividend will generally result in deemed
dividend treatment to holders of the LYONs, but generally an increase in the
event of stock dividends or the distribution of rights to subscribe for common
stock will not.
TREATMENT OF NON-U.S. HOLDERS
Payments of contingent interest made to Non-U.S. Holders will not be
exempt from United States Federal income or withholding tax and, therefore,
Non-U.S. Holders will be subject to withholding on such payments of contingent
interest at a rate of 30%, subject to reduction by an applicable treaty or upon
the receipt of a Form W-8ECI from a Non-U.S. Holder claiming that the payments
are effectively connected with the
36
conduct of a United States trade or business. A Non-U.S. Holder that is subject
to the withholding tax should consult its tax advisors as to whether it can
obtain a refund for a portion of the withholding tax, either on the grounds
that some portion of the contingent interest represents a return of principal
under the CPDI regulations, or on other grounds.
All other payments on the LYONs made to a Non-U.S. Holder, including a
payment in common stock pursuant to a conversion, and any gain realized on a
sale or exchange of the LYONs (other than income or gain attributable to
accrued contingent interest payments), will be exempt from United States income
or withholding tax, provided that: (i) such Non-U.S. Holder does not own,
actually or constructively, 10 percent or more of the total combined voting
power of all classes of our stock entitled to vote, is not a controlled foreign
corporation related, directly or indirectly, to us through stock ownership, and
is not a bank receiving interest described in section 881(c)(3)(A) of the Code;
(ii) the statement requirement set forth in section 871(h) or section 881(c) of
the Code has been fulfilled with respect to the beneficial owner, as discussed
below; (iii) such payments and gain are not effectively connected with the
conduct by such Non-U.S. Holder of a trade or business in the United States;
and (iv) our common stock continues to be actively traded within the meaning of
section 871(h)(4)(C)(v)(I) of the Code (which, for these purposes and subject
to certain exceptions, includes trading on the NYSE).
The statement requirement referred to in the preceding paragraph will be
fulfilled if the beneficial owner of a LYONs certifies on IRS Form W-8BEN,
under penalties of perjury, that it is not a United States person and provides
its name, address and such other information as the form may require.
If a Non-U.S. Holder of the LYONs is engaged in a trade or business in
the United States, and if interest on the LYONs is effectively connected with
the conduct of such trade or business, the Non-U.S. Holder, although exempt
from the withholding tax discussed in the preceding paragraphs, will generally
be subject to regular United States Federal income tax on interest and on any
gain realized on the sale or exchange of the LYONs in the same manner as if it
were a U.S. Holder. In lieu of the certificate described in the preceding
paragraph, such a Non-U.S. Holder will be required to provide to the
withholding agent a properly executed IRS Form W-8ECI (or successor form) in
order to claim an exemption from withholding tax. In addition, if such a
Non-U.S. Holder is a foreign corporation, such Non-U.S. Holder may be subject
to a branch profits tax equal to 30% (or such lower rate provided by an
applicable treaty) of its effectively connected earnings and profits for the
taxable year, subject to certain adjustments.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Payments of principal, premium, if any, and interest (including original
issue discount and a payment in common stock pursuant to a conversion of the
LYONs) on, and the proceeds of disposition or retirement of, the LYONs may be
subject to information reporting and United States Federal backup withholding
tax at the rate of 30.5% if the U.S. Holder thereof fails to supply an accurate
taxpayer identification number or otherwise fails to comply with applicable
United States information reporting or certification requirements. Any amounts
so withheld will be allowed as a credit against such U.S. Holder's United
States Federal income tax liability.
37
SELLING SECURITYHOLDERS
The LYONs were originally issued by us to and resold by Merrill Lynch in
transactions exempt from the registration requirements of the Securities Act to
persons reasonably believed by to be "qualified institutional buyers" as
defined by Rule 144A under the Securities Act. The selling securityholders may
from time to time offer and sell pursuant to this prospectus any or all of the
LYONs listed below and shares of common stock issued upon purchase by us, or
conversion, of such LYONs. When we refer to the "selling securityholders" in
this prospectus, we mean those persons listed in the table below, as well as
the pledgees, donees, assignees, transferees, successors and others who later
hold any of the selling securityholders' interests.
We are filing this registration statement pursuant to a registration
rights agreement that we entered into with Merrill Lynch, whereby we agreed, at
our expense, and for the benefit of the holders of the LYONs, to file a shelf
registration statement covering resale of the LYONs and the shares of common
stock issuable upon conversion of the LYONs within 90 days after June 4, 2001
and to cause the registration statement to become effective within 180 days of
June 4, 2001. We are also generally required to keep the registration statement
effective until June 4, 2003 subject to certain black-out periods upon certain
corporate events.
The table below sets forth the name of each selling securityholder, the
aggregate principal amount at maturity of LYONs that each selling
securityholder may offer pursuant to this prospectus and the number of shares
of common stock into which such LYONs are convertible. Unless set forth below,
none of the selling securityholders has, or within the past three years has
had, any material relationship with us or any of our predecessors or affiliates.
We have prepared the table below based on information given to us by the
selling securityholders on or prior to November 20, 2001. Any or all of the
LYONs or shares of common stock listed below may be offered for sale pursuant
to this prospectus by the selling securityholders from time to time.
Accordingly, no estimate can be given as to the amounts of LYONs or shares of
common stock that will be held by the selling securityholders upon consummation
of any such sales. In addition, the selling securityholders listed in the table
below may have acquired, sold or transferred, in transactions exempt from the
registration requirements of the Securities Act, some or all of their LYONs
since the date as of which the information in the table is presented.
Information about the selling securityholders may change over time. Any
changed information will be set forth in prospectus supplements. From time to
time, additional information concerning ownership of the LYONs and shares of
common stock may rest with certain holders thereof not named in the table below
and of whom we are unaware.
AGGREGATE NUMBER OF PERCENTAGE
PRINCIPAL SHARES OF OF SHARES OF
AMOUNT AT COMMON COMMON
MATURITY OF PERCENTAGE STOCK THAT STOCK
LYONS THAT OF LYONS MAY BE OUTSTANDING
NAME MAY BE SOLD OUTSTANDING SOLD (1) (2)
---- ------------ ----------- ---------- ------------
Ariston Internet Convertible Fund............... $ 40,000 * 707 *
Canyon Capital Arbitrage Master Hedge Fund, Ltd. $ 10,000,000 1.8% 176,686 *
Canyon MAC 18 LTD (RMF)......................... $ 4,000,000 * 70,672 *
Canyon Value Realization Fund (Cayman), Ltd..... $ 30,000,000 5.5% 530,058 *
D.E. Shaw Investments, L.P...................... $ 1,000,000 * 17,668 *
D.E. Shaw Valence, L.P.......................... $ 4,000,000 * 70,672 *
Deutsche Banc Alex Brown Inc.................... $100,140,000 18.2% 1,769,334 1.2%
First Union International Capital Markets Inc... $ 19,000,000 3.5% 335,703 *
KBC Financial Products (Cayman Islands) Limited. $ 70,000,000 12.7% 1,236,802 *
KBC Financial Products USA Inc.................. $ 7,700,000 * 136,048 *
38
AGGREGATE NUMBER OF PERCENTAGE
PRINCIPAL SHARES OF OF SHARES OF
AMOUNT AT COMMON COMMON
MATURITY OF PERCENTAGE STOCK THAT STOCK
LYONS THAT OF LYONS MAY BE OUTSTANDING
NAME MAY BE SOLD OUTSTANDING SOLD (1) (2)
---- ------------ ----------- ---------- ------------
Kentfield Trading, Ltd................................. $ 9,360,000 1.7% 165,378 *
LDG Limited............................................ $ 250,000 * 4,417 *
Nomura Securities International, Inc................... $ 2,000,000 * 35,337 *
Onyx Fund Holdings, LDC................................ $ 10,000,000 1.8% 176,686 *
R 2 Investments, LDC................................... $ 36,500,000 6.6% 644,904 *
SG Cowen Securities Corporation........................ $ 33,500,000 6.1% 591,898 *
TD Securities (USA) Inc................................ $ 10,000,000 1.8% 176,686 *
TQA Master Plus Fund, LTD.............................. $ 1,600,000 * 28,270 *
TQA Master Fund, LTD................................... $ 2,600,000 * 45,938 *
UBS A9 London Branch................................... $ 55,000,000 10% 971,773 *
Value Realization Fund, L.P............................ $ 13,000,000 2.4% 229,692 *
Wilmington Trust Company as Owner Trustee for
Forrestal Funding Master Trust....................... $ 5,250,000 * 92,760 *
ZCM Asset Holding Company Bermuda LTD.................. $ 250,000 * 4,417 *
Zurich Institutional Benchmarks Master Fund Limited.... $ 250,000 * 4,417 *
All Other Holders of LYONs or Future Transferees,
Pledgees, Donees, Assignees or Successors of any such
Holders(3)(4)........................................ $124,560,000 22.6% 2,200,807 1.5%
Total.................................................. $550,000,000 100% 9,717,730 6.3%
* Less than one percent (1%).
(1)Assumes conversion of all of the holder's LYONs at a conversion rate of
17.6686 shares of common stock per $1,000 principal amount at maturity of
the LYONs. This conversion rate is subject to adjustment, however, as
described under "Description of the LYONs--Conversion Rights --Conversion
Rate and Delivery of Shares of common stock." As a result, the number of
shares of common stock issuable upon conversion of the LYONs may increase or
decrease in the future. Does not include shares of common stock that may be
issued by us upon purchase of LYONs by us at the option of the holder.
(2)Calculated based on Rule 13d-3(d)(i) of the Exchange Act, using 143,764,559
shares of common stock outstanding as of November 16, 2001. In calculating
this amount for each holder, we treated as outstanding the number of shares
of common stock issuable upon conversion of all of that holder's LYONs, but
we did not assume conversion of any other holder's LYONs. Does not include
shares of common stock that may be issued by us upon purchase of LYONs by us
at the option of the holder.
(3)Information about holders of LYONs who wish to become selling
securityholders hereunder will be set forth in supplements which will be
included in post-effective amendments to the registration statement of which
this prospectus is part.
(4)Assumes that any other holders of LYONs, or any future pledgees, donees,
assignees, transferees or successors of or from any such other holders of
LYONs, do not beneficially own any shares of common stock other than shares
of common stock issuable upon conversion of the LYONs at the initial
conversion rate.
As described above under "Description of Capital Stock," with limited
exceptions each share of common stock is entitled to one vote per share and
each share of Class B common stock is entitled to 10 votes per share on all
matters subject to stockholder approval. None of the individually named holders
owns beneficially securities representing one percent or more of the total
voting power of Vishay.
39
PLAN OF DISTRIBUTION
We are registering the LYONs and shares of common stock covered by this
prospectus to permit holders to conduct public secondary trading of these
securities from time to time after the date of this prospectus. We have agreed,
among other things, to bear all expenses, other than underwriting discounts and
selling commissions, in connection with the registration and sale of the LYONs
and shares of common stock covered by this prospectus.
We will not receive any of the proceeds from the resale of the LYONs by
the selling securityholders or the sale of any common stock issuable upon
conversion of the LYONs. We have been advised by the selling securityholders
that the selling securityholders may sell all or a portion of the LYONs and
shares of common stock beneficially owned by them and offered hereby from time
to time:
. directly; or
. through underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, commissions or concessions
from the selling securityholders or from the purchasers of the LYONs
and shares of common stock for whom they may act as agent.
The LYONs and shares of common stock may be sold from time to time in one
or more transactions at:
. fixed prices, which may be changed;
. prevailing market prices at the time of sale;
. varying prices determined at the time of sale; or
. negotiated prices.
These prices will be determined by the holders of the securities or by
agreement between these holders and underwriters or dealers who may receive
fees or commissions in connection with the sale. The aggregate proceeds to the
selling securityholders from the sale of the LYONs or shares of common stock
offered by them hereby will be the purchase price of the LYONs or shares of
common stock less discounts and commissions, if any.
The sales described in the preceding paragraph may be effected in
transactions:
. on any national securities exchange or quotation service on which the
LYONs and shares of common stock may be listed or quoted at the time
of sale, including the New York Stock Exchange in the case of shares
of common stock;
. in the over-the-counter market;
. in transactions otherwise than on such exchanges or services or in
the over-the-counter market; or
. through the writing of options.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as an agent on both sides of the
trade.
In connection with sales of the LYONs and shares of common stock or
otherwise, the selling securityholders may enter into hedging transactions with
broker-dealers. These broker-dealers may in turn engage in short sales of the
LYONs and shares of common stock in the course of hedging their positions. The
selling securityholders may also sell the LYONs and shares of common stock
short and deliver the LYONs and shares of common stock to close out short
positions, or loan or pledge the LYONs and shares of common stock to
broker-dealers that in turn may sell the LYONs and shares of common stock.
40
To our knowledge, there are currently no plans, arrangements or
understandings between any selling securityholders and any underwriter,
broker-dealer or agent regarding the sale of the LYONs and shares of common
stock by the selling securityholders. Selling securityholders may not sell any,
or may not sell all, of the LYONs and shares of common stock offered by them
pursuant to this prospectus. In addition, we cannot assure you that a selling
securityholder will not transfer, devise or gift the LYONs and shares of common
stock by other means not described in this prospectus. In addition, any
securities covered by this prospectus that qualify for sale pursuant to Rule
144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A
rather than pursuant to this prospectus.
The outstanding shares of common stock are listed for trading on the New
York Stock Exchange.
The selling securityholders and any broker and any broker-dealers, agents
or underwriters that participate with the selling securityholders in the
distribution of the LYONs or shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act. In this case, any
commissions received by these broker-dealers, agents or underwriters and any
profit on the resale of the LYONs or shares of common stock purchased by them
may be deemed to be underwriting commissions or discounts under the Securities
Act. In addition, any profits realized by the selling securityholders may be
deemed to be underwriting commissions.
The LYONs were issued and sold in June 2001 in transactions exempt from
the registration requirements of the Securities Act to persons reasonably
believed by the Initial Purchaser to be "qualified institutional buyers," as
defined in Rule 144A under the Securities Act. We have agreed to indemnify
Merrill Lynch, as the initial purchaser, and each selling securityholder, and
each selling securityholder has agreed to indemnify us, the initial purchaser
and each other selling securityholder against specified liabilities arising
under the Securities Act.
The selling securityholders and any other person participating in such
distribution will be subject to the Exchange Act. The Exchange Act rules
include, without limitation, Regulation M, which may limit the timing of
purchases and sales of any of the LYONs and the underlying shares of common
stock by the selling securityholders and any such other person. In addition,
Regulation M of the Exchange Act may restrict the ability of any person engaged
in the distribution of the LYONs and the underlying shares of common stock to
engage in market-making activities with respect to the particular LYONs and the
underlying shares of common stock being distributed for a period of up to five
business days prior to the commencement of the distribution. This may affect
the marketability of the LYONs and the underlying shares of common stock and
the ability of any person or entity to engage in market-making activities with
respect to the LYONs and the underlying shares of common stock.
We will use our reasonable efforts to keep the registration statement of
which this prospectus is a part effective until the earlier of:
. the sale, pursuant to the registration statement, of all the
securities registered thereunder;
. the expiration of the holding period applicable to the securities
held by persons that are not our affiliates under Rule 144(k) under
the Securities Act or any successor provision; and
. sale to the public under Rule 144 of all the securities registered
thereunder.
Our obligation to keep the registration statement effective is subject to
specified, permitted exceptions. In these cases, we may prohibit offers and
sales of the LYONs and shares of common stock pursuant to the registration
statement to which this prospectus relates.
41
LEGAL MATTERS
Certain legal matters regarding the LYONs and the shares of common stock
issuable upon conversion of the LYONs are being passed upon for Vishay by
Kramer Levin Naftalis & Frankel LLP, New York, New York.
EXPERTS
The consolidated financial statements of Vishay Intertechnology, Inc.
appearing in Vishay's Annual Report (Form 10-K) for the year ended December 31,
2000, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
42
$550,000,000
AGGREGATE PRINCIPAL AMOUNT
AT MATURITY
----------------
[LOGO]
VISHAY INTERTECHNOLOGY, INC.
LIQUID YIELD OPTION(TM) NOTES DUE 2021
(ZERO COUPON -- SUBORDINATED)
----------------
PROSPECTUS
----------------
NOVEMBER 21, 2001
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The Registrant is paying all of the selling securityholders' expenses
related to this offering, except that the selling securityholders will pay any
applicable broker's commissions and expenses. The following table sets forth
the approximate amount of fees and expenses payable by the Registrant in
connection with this Registration Statement and the distribution of the LYONs
and shares of common stock registered hereby.
SEC registration fee........... $ 76,098
Legal fees and expenses........ $100,000
Accounting fees and expenses... $ 30,000
Printing and engraving expenses $ 30,000
Miscellaneous.................. $ 10,000
--------
Total.......................... $246,098
========
--------
* Except for the SEC registration fee, all of the foregoing expenses have been
estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent
of the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, in any criminal proceeding, if such
person had no reasonable cause to believe his conduct was unlawful; provided
that, in the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such
person shall have been adjudged to be liable to the corporation unless and only
to the extent that the adjudicating court determines that such indemnification
is proper under the circumstances.
Vishay's certificate of incorporation provides that every person who is
or was a director, officer, employee or agent of the corporation shall be
indemnified by the corporation against all judgments, payments in settlement,
fines, penalties, and other reasonable costs and expenses resulting from any
action, proceeding, investigation or claim which is brought or threatened by or
in the right of Vishay or by anyone else by reason of such person being or
having been a director, officer, employee or agent of Vishay or any act or
omission of such person in such capacity. Such indemnification shall be
available either if such person is wholly successful in defending such action
or if, in the judgment of a court or the Board of Directors or in the opinion
of independent legal counsel, such person acted in good faith in what he
reasonably believed to be in the best interests of the corporation and was not
adjudged liable to the corporation, and, in any criminal action, had no
reasonable cause to believe that his action was unlawful. In the case of a
derivative action, such indemnification shall not be made other than in respect
of a court approved settlement or if, in the opinion of independent counsel,
the person satisfied the standard of conduct specified in the prior sentence,
the action was without substantial merit, the settlement was in the best
interest of Vishay and the payment is permissible under applicable law.
Directors may authorize the advancement of reasonable costs and expenses in
connection with any such action to the extent permitted under Delaware law.
Vishay's certificate of incorporation further provides that no director shall
have any personal liability to Vishay or to its stockholders for any monetary
damages for breach of fiduciary duty, to the extent permitted under the
Delaware General Corporation Law.
II-1
Vishay maintains $55 million of insurance to reimburse the directors and
officers of Vishay and its subsidiaries, for charges and expenses incurred by
them for wrongful acts claimed against them by reason of their being or having
been directors or officers of Vishay or any of its subsidiaries. Such insurance
specifically excludes reimbursement of any director or officer for any charge
or expense incurred in connection with various designated matters, including
libel or slander, illegally obtained personal profits, profits recovered by
Vishay pursuant to Section 16(b) of the Exchange Act and deliberate dishonesty.
ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
3.1 Composite Amended and Restated Certificate of Incorporation of the Company dated August 3,
1995. Incorporated by reference to Exhibit 3.1 to Form 10-Q for the quarter ended June 30, 1995.
Certificates of Amendment of Composite Amended and Restated Certificate of Incorporation of the
Company. Incorporated by reference to Exhibit 3.1 to Form 10-Q for the quarter ended June 30, 1997
and Exhibit 4.3 to form 8-K filed November 13, 2001.
3.2 Amended and Restated Bylaws of Registrant. Incorporated by reference to Exhibit 3.2 to
Registration Statement No. 33-13833 of Registrant on Form S-2 under the Securities Act of 1933
(the "Form S-2") and Amendment No. 1 to Amended and Restated Bylaws of Registrant
Incorporated by reference to Exhibit 3.2 to Form 10-K file number 1-7416 for fiscal year ended
December 31, 1993.
4.1* Indenture dated as of June 4, 2001 between Vishay Intertechnology, Inc. and Bank of New York as
Trustee (incorporated by reference to Exhibit 4.1 to Current Report of Registrant on Form 8-K filed
on June 18, 2001 under the Securities Exchange Act of 1934 except that clause (x) of Section 5
thereof is corrected to read "(x) 0.0625% of the average LYON Market Price for the Five Day Period
with to such Contingent Interest Period and").
4.2* Form of Liquid Yield Option (TM) Note Due 2021 (Zero Coupon--Subordinated) (incorporated by
reference to Exhibit 4.1 to Current Report of Registrant on Form 8-K filed on June 18, 2001
Exchange Act of 1934). under the Securities.
4.3* Registration Rights Agreement dated as of June 4, 2001 between Vishay Intertechnology and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
5* Opinion of Kramer Levin Naftalis & Frankel LLP.
8* Tax Opinion of Kramer Levin Naftalis & Frankel LLP.
12 Statement of Vishay Intertechnology, Inc. regarding Computation of Ratio of Earnings to Fixed
Charges.
23.1* Consent of Ernst & Young LLP.
23.2* Consent of Kramer Levin Naftalis & Frankel LLP (included in Exhibit 5 and Exhibit 8).
24* Powers of Attorney.
25* Statement of Eligibility of Trustee on Form T-1.
* Previously filed
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(ii) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(iii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or in
II-2
the aggregate, represent a fundamental change in the information set
forth in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered)
and any deviation from the maximum aggregate offering price may be
reflected in the form of prospectus filed with the SEC pursuant to Rule
424(b) under the Securities Act, if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iv) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed or
furnished to the Commission by the Registrant pursuant to Section 13 or
15(d) of the Securities and Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(v) That, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(vi) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant, pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Post-Effective Amendment No. 1 to the registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Malvern, State of Pennsylvania, on the 21st day of November, 2001.
VISHAY INTERTECHNOLOGY, INC.
By: /S/ ROBERT A. FREECE
-------------------------------
ROBERT A. FREECE
DIRECTOR, SENIOR VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the registration statement has been signed by
the following persons on November 21, 2001 in the capacities indicated below.
SIGNATURE TITLE
--------- -----
/S/ * Director, Chairman of the Board, and Chief Executive
-------------------- Officer (Principal Executive Officer)
FELIX ZANDMAN
/S/ AVI D. EDEN Director, Vice Chairman of the Board, Executive Vice
-------------------- President and General Counsel
AVI D. EDEN
/S/ * Director
--------------------
ELI HURVITZ
/S/ * Director, President and Chief Operating Officer
--------------------
GERALD PAUL
/S/ * Director, Executive Vice President, Treasurer and Chief
-------------------- Financial Officer (Principal Financial and Accounting
RICHARD N. GRUBB Officer)
/S/ ROBERT A. FREECE Director, Senior Vice President
--------------------
ROBERT A. FREECE
/S/ * Director
--------------------
DR. EDWARD B. SHILS
/S/ * Director
--------------------
ZIV SHOSHANI
/S/ * Director
--------------------
MARK I. SOLOMON
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SIGNATURE TITLE
--------- -----
/S/ * Director
----------------------
JEAN-CLAUDE TINE
/S/ * Director
----------------------
MARC ZANDMAN
/S/ * Director
----------------------
RUTA ZANDMAN
* By: /s/ Avi D. Eden
----------------------
Avi D. Eden
Attorney-In-Fact
II-5