As filed with the Securities and Exchange Commission on December 22, 2000_______, 2001
Registration No. 333-
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
VISHAY INTERTECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 38-1686453
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
-----------
63 Lincoln Highway
Malvern, Pennsylvania 19355-2120
(610) 644-1300
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
-----------
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
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------
Copy to:
Scott S. Rosenblum, Esq.
Abbe L. Dienstag, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
----------
Approximate dateDate of commencementCommencement of proposed saleProposed Sale to the public:Public: From time to
time after the effective date of this Registration Statement.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|[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. |_|
(Cover continued on next page)
-----------
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE
PROSPECTUS SET FORTH HEREIN ALSO RELATES TO SECURITIES REGISTERED PURSUANT TO A
PRIOR REGISTRATION STATEMENT.[_]
================================================================================
CALCULATION OF REGISTRATION FEE
=============================================================================================================================
-----------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum maximum maximum
Title of each class of amount to offering price aggregate Amount of
securities to be registered be registered (1) per unit (2) offering price(2) registration fee
-----------------------------------------------------------------------------------------------------------------------------
Liquid Yield Option ((TM)) Notes
Due 2021 ("LYONs")...................... $550,000,000 $553.43 $304,390 $76,098
Common Stock, par value $.10 per -- -- -- --
share (3)...............................
=============================================================================================================================
(TM) Trademark of Merrill Lynch & Co., Inc.
(1) The Registrant hereby amends this Registration Statement on such date or
dates as may be necessaryLYONs were issued at an original price of $551.26 per $1,000
principal amount at maturity, representing an aggregate initial issue price of
$303,193,000 and an aggregate principal amount at maturity of $550,000,000.
(2) This estimate is made pursuant to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a)Rule 457(c) of the Securities
Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
================================================================================
(Cover continued from previous page)
-----------
CALCULATION OF REGISTRATION FEE
================================================================================
- --------------------------------------------------------------------------------
Title of each class of Amount to Proposed Proposed Amount of
securities to be registered be maximum maximum registration
registered offering aggregate fee
price offering
per unit(1) price(1)(2)
- --------------------------------------------------------------------------------
Debt Securities(3).....
- --------------------------------------------------------------------------------
Common Stock, par value
$0.10 per share (4)(5)
- --------------------------------------------------------------------------------
Total.................. $1,000,000,000 100% $1,000,000,000 $208,321
(6) (6) (7)
================================================================================
(1) Estimated solely for the purpose of calculating the registration fee. The above
calculation is based on the average of the bid and ask prices for the
Registrant's LYONs in secondary market transactions executed by Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") of the LYONs on August
20, 2001, as reported to the Registrant by Merrill Lynch.
(3) Also includes such indeterminate number of shares of common stock
as may be issued upon conversion of and/or in exchange for LYONs registered
hereby, which shares are not subject to an additional fee pursuant to Rule
457(o) under the Securities Act of 1933, as
amended, and exclusive of accrued interest, if any.
(2) Of the $1,000,000,000 of securities being registered hereunder,
pursuant to Rule 429(b) under the Securities Act of 1933, as
amended, an aggregate of $166,717,500 of the securities are being
carried forward from the Registrant's prior registration statement
on Form S-3 (SEC File No. 333-34178).
(3) Subject to note (6) below, there are being registered hereunder an
indeterminate principal amount of debt securities. If any debt
securities are being issued at an original issue discount, then the
offering price shall be in such greater principal amount as shall
result in an aggregate initial offering price not to exceed
$1,000,000,000, less the dollar amount of any securities previously
issued hereunder.
(4) Subject to note (6) below, there are being registered hereunder an
indeterminate number of common shares as may be sold, from time to
time, by the Registrant.
(5) Including such indeterminable number of common shares which may from
time to time be issued upon conversion or exchange of debt
securities registered hereunder, to the extent any of such debt
securities are by their terms convertible into such common shares.
Under Rule 457(i), no fee is payable with respect to such common
shares.
(6) In no event will the aggregate initial offering price of all
securities issued from time to time pursuant to this Registration
Statement exceed $1,000,000,000, or its equivalent if some or all of
the debt securities are denominated in one or more foreign
currencies, foreign currency units or composite currencies. Any
securities
registered hereunder may be sold separately or as units with other
securities registered hereunder.
(7) The amount of registration fee, calculated in accordance with
Section 6(b) of the Securities Act ofAct.
----------
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 as amended, and Rule
457(o) promulgated thereunder, is .00025 of the maximum aggregate
offering price at which the securities registered pursuant to thisOR 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.
EXPLANATORY NOTE
This Registration Statement are proposedcontains a prospectus to be offered.used in connection
with the resale by selling securityholders of Liquid Yield Option(TM) Notes Due
2021 ("LYONs") issued by Vishay Intertechnology, Inc.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING SECURITYHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. 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.
SUBJECT TO COMPLETION, DATED DECEMBER 22, 2000_________, 2001 PROSPECTUS
$1,000,000,000$550,000,000
AGGREGATE PRINCIPAL AMOUNT
AT MATURITY
-----------
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
___________
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 3.00% 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 August 20, 2001, the last reported sale price of our common
stock was $21.97 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 49.
Purchase of the Lyons By Vishay Intertechnology, Inc.
Debt Securities
Common Stock
-----------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 Intertechnology, Inc.at Option of the Holder." We may offer from timechoose to
time:
o unsecured debt securities;pay the purchase price in cash or in common stock or a combination of cash and
o
common stock. This prospectusIn addition, upon a change in control or delisting event of Vishay
on or before June 4, 2006, each holder may not be usedrequire us to sell securities unless accompanied byrepurchase for cash all
or a prospectus supplement.
-----------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."
___________
Investing in debt securities or common stockthe LYONs involves risks that are described in the "Risk
Factors" section beginning on Page 6page 16 of this prospectus.
-----------___________
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, nor any state securities
commission nor any other regulatory body has approved or disapproved of these
securities or determined if this documentprospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is _____ ___, 2001.
(TM) TRADEMARK OF MERRILL LYNCH & CO., 2000.INC.
TABLE OF CONTENTS
Where You Can Find More Information. ....................................... 4
Forward-Looking Information ................................................ 6
Summary .................................................................... 8
Risk Factors ............................................................... 16
Use of Proceeds. ........................................................... 23
Ratio of Earnings to Fixed Charges ......................................... 23
Description of LYONs ....................................................... 24
Description of Capital Stock ............................................... 46
Certain United States Federal Income Tax Consequences ...................... 48
Selling Securityholders .................................................... 55
Plan of Distribution ....................................................... 58
Legal Matters .............................................................. 60
Experts .................................................................... 60
-2-
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.
-3-
WHERE YOU CAN FIND MORE INFORMATION
In connection with this offering, Vishay has filed with the Securities and
Exchange Commission a registration statement under the Securities Act of 1933,
as amended, relating to the securities. As permitted by the SEC rules, this
document omits certain information included in the registration statement. For a
more complete understanding of the securities and this offering, you should
refer to the registration statement, including its exhibits.
Vishay filesWe file annual, quarterly and current reports, proxy statements and other
information with the SEC. Vishay's filings are available to the public
over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any public offering document Vishay files with the SECwe
file without charge at the SEC's public reference
rooms inPublic Reference Room, 450 Fifth Street, N.W.,
Room 1024, Washington D.C., New York, New York20549
You can also request copies of all or any portion of these documents by
writing the Public Reference Section and Chicago, Illinois.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 reference rooms.
Vishay's common shares are listed onfrom 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, under the
symbol "VSH". You can obtain information about Vishay from the New York Stock
Exchange at 20 Broad Street, New York, New York 10005.
The SEC allows Vishay to "incorporateWe are "incorporating by reference" into this prospectus certain
information contained
in documents filedthat we file with the SEC, whichSEC. This means that Vishay can disclosewe are disclosing
important information to you by referring you to those documents. These incorporated
documents contain important business and financial information about Vishay that
is not included in or delivered with this document. The information
incorporated by reference is considered to be part of this document, andprospectus, except
for any information superseded by information contained directly in this
prospectus. Information that we file later information
filed with the SEC mayunder the Exchange Act
will automatically update and supersedeinformation in this information. Vishay
incorporatesprospectus. In all cases, you
should rely on the later information over different information included in this
prospectus. We incorporate by reference o itsthe 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:
. Annual Report on Form 10-K for the year ended December 31, 1999;
o its2000;
. Quarterly ReportsReport on Form 10-Q for the quartersquarter ended March 31, 2000,2001;
. Quarterly Report on Form 10-Q for the quarter ended June 30, 2000,2001; and
September 30, 2000;
o its. Current Report on Form 8-K filed May 24, 2000;
and any future filings made with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the United States Securities Exchange Act of 1934 prior to the end of
the offering of securities under this document.on June 18, 2001.
-4-
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 Vishayus at the following address andor telephone
number:
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, Pennsylvania 19355-2120
(610) 644-1300
Attention: Richard N. Grubb
Exhibits to the filingsdocuments incorporated by reference will not be sent,
however, unless those exhibits have been specifically beenreferenced in this
prospectus.
-5-
FORWARD LOOKING INFORMATION
Some of the statements in this prospectus and in documents incorporated by
reference in this document.
-2-
You should rely only on the information providedconstitute forward-looking statements. These forward-looking
statements reflect our current views with respect to future events or incorporated by
reference in this document. Vishay has not authorized anyone else to provide you
with different information. You should not assume that the information in this
document is accurate as of any date after the date on the front of this
document.
This document is not an offer to sell these securitiesour
financial performance, and it is not
soliciting an offer to buy these securities in any jurisdiction where the offer
or sale is not permitted.
-3-
TABLE OF CONTENTS
Page
----
Where You Can Find More Information..................................... 2
Forward Looking Information............................................. 4
Risk Factors............................................................ 6
Vishay.................................................................. 10
Use of Proceeds......................................................... 11
Ratio of Earnings to Fixed Charges...................................... 11
Description of the Debt Securities...................................... 12
Description of Capital Stock............................................ 21
Plan of Distribution.................................................... 22
Legal Matters........................................................... 23
Experts................................................................. 23
FORWARD LOOKING INFORMATION
Certain statements contained or incorporated by reference in this
document are "forward looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. All forward looking statements involve risks and uncertainties. In particular, any statement contained in this document
or any document incorporated by reference in this document regarding demand for
the Company's products, future sales, operating margins and efficiencies, the
consummation and benefits of future acquisitions, and product development and
expansion, are subject tocertain known and unknown risks,
uncertainties and contingencies, manyother 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 beyondqualified in their
entirety by reference to the controlfactors 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, and June 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 which maycompetes;
. 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;
-6-
. 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; and
. the ability to achieve anticipated synergies and other cost savings in
connection with such pending and future acquisitions.
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 anticipatedthose 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, performancesperformance or achievements. FactorsWe cannot assure you that might affect
such forward looking statements include, among other things:
o a declineprojected
results or events will be achieved or will occur.
-7-
SUMMARY
The following summary is qualified in demand for Vishay's productsits entirety by customers, including OEMs and
distributors,
o backlog cancellations and delivery extensions,
o competitive pressures,
o recessionary trends,
o technology shifts,
o currency fluctuations,
o the application of relevant accounting principles and any changes in such
principles,
-4-
o changes in laws,
o cancellation of government grants or tax benefits,
o labor unrest,
o factory under-utilization, and
o capacity constraints.
See also "Risk Factors."
-5-
RISK FACTORS
An investment in the securities offered through this prospectus involves
certain risks. You should carefully consider the following risks, as well as
othermore detailed
information containedincluded elsewhere in this prospectus or incorporated by reference in this prospectus.
Current SlowdownBecause 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;
-8-
. 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. Its
telephone number is (610) 644-1300.
Recent Developments
On May 25, 2001, the Company commenced an offer to exchange 1.5 shares of
its common stock for each share of common stock of its Siliconix incorporated
subsidiary not already owned by the Company. The Company owns 80.4% of
Siliconix's outstanding shares. This exchange offer expired at 5:00 PM on July
5, 2001. The exchange offer was conditioned on the tender of a majority of the
shares of Siliconix not already owned by the Company. Because only approximately
40% of the publicly held shares of Siliconix common stock were tendered pursuant
to the offer, the offer terminated in accordance with its terms on July 5, 2001.
On April 25, 2001, Siliconix filed a patent infringement lawsuit against
General Semiconductor, Inc. The suit was filed in the United States District
Court for the Northern District of California and alleged that certain General
Semiconductor products infringe two patents held by Siliconix. On July 2, 2001,
General Semiconductor filed and served its answer to Siliconix's complaint and
asserted counterclaims against Siliconix. On August 3, 2001, Siliconix filed a
motion to dismiss or strike certain affirmative defenses alleged by General
Semiconductor in its answer and to dismiss or strike down all of General
Semiconductor's counterclaims. This motion is scheduled to be heard on September
14, 2001.
On July 30, 2001, the Company announced the completion of its acquisition
of the infrared components business of Infineon Technologies AG for
approximately $120 million. Vishay will assume Infineon's development, marketing
and distribution activities at Infineon's San Jose, California location and
Infineon's production facility in Krubong, Malaysia. In fiscal year 2000,
Infineon's infrared components business had revenues of approximately $133
million.
On July 31, 2001, the Company signed a merger agreement with General
Semiconductor, pursuant to which Vishay will acquire General Semiconductor in a
stock-for-stock, tax-free merger. In the merger, each share of common stock of
General Semiconductor will be exchanged for 0.563 shares of Vishay's common
stock. General Semiconductor designs, manufactures and sells a broad array of
power management semiconductor products, including low-to-medium power
rectifiers, transient voltage suppressors (TVS), small signal transistors,
diodes and
-9-
MOSFETs. In the year 2000, General Semiconductor had net sales of approximately
$494 million. The transaction is subject to customary regulatory review,
approval by the stockholders of General Semiconductor and the approvals of
Vishay's stockholders referred to in the following paragraph.
In connection with the proposed acquisition of General Semiconductor,
Vishay will solicit the vote of its stockholders to increase the authorized
capital stock of Vishay and to approve the issuance of Vishay shares in the
merger with General Semiconductor. Under the proposal to increase Vishay's
authorized capital stock, the authorized common stock would be increased from
150 million shares to 300 million shares and the authorized Class B common stock
would be increased from 20 million shares to 40 million shares. Holders of
Vishay's Class B convertible common stock who collectively control approximately
54% of Vishay's outstanding voting power have agreed to vote in favor of these
proposals.
At the current time, there are not a sufficient number of authorized but
unissued shares of Vishay common stock available for issuance upon conversion of
the Class B common stock, conversion of the LYONs and exercise of all
outstanding options. Holders of 11,886,200 shares of Class B common stock have
agreed not to convert their shares until there are a sufficient number of
authorized but unissued shares of common stock for them to do so. If the
proposal to increase the authorized capital stock of Vishay is approved, Vishay
will have sufficient authorized but unissued shares of common stock for all
these purposes, as well as for issuance of shares in the merger with General
Semiconductor.
-10-
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 3.00% 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
-11-
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 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)
-12-
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,
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 3.00% 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
-13-
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 to
$602.77 per LYON;
. on June 4, 2006 for a price equal to
$639.76 per LYON;
. on June 4, 2011 for a price equal to
$742.47 per LYON; and
. on June 4, 2016 for a price equal to
$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
-14-
redemption prices set forth in
"Description of LYONs--Redemption of LYONs
at the Option of Vishay."
Sinking Fund .................... None.
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."
-15-
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
Our business is cyclical and current softness in the electronic component
industry may continue and may become more pronounced.
Vishay and others in the electronic and semi-conductorsemiconductor component industry
have recently experienced softness in product demand on a global basis,
resulting in order cancellations and deferrals. This softness is primarily
attributable to a slowing of growth in the personal computer and cell phone
product markets. This slowdown may continue and may become more pronounced. Such
a slowdown in demand, as well as recessionary trends in the global economy in
general or in specific countries or regions where we sell the bulk of our
products, such as the U.S., Germany, France or the Pacific Rim, makes it more
difficult for us to predict our future sales, which also makes it more difficult
to manage our operations, and could adversely impact our results of operations.
In the past, adverse economic trends that resulted in a slowdown in demand for
electronic components 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 our 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 second quarter 2001
operating results reflect some of these industry trends. For example, during the
first half of 2001 restructuring costs were $35.3 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, and Vishay
estimates that additional restructuring costs during 2001 will be approximately
$35 million.
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.
-16-
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 succeed in
consummating transactions with suitable acquisition candidates in the future. We
can also give you no assurance that acquisitions that Vishay consummates in the
future will be successful. If an acquired business, such as the acquisition
currently underway to acquire General Business RisksSemiconductor, 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.
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 could decrease Vishay's ratio of
earnings to fixed charges and adversely affect other leverage criteria. Under
our existing credit facility we are required to secure any borrowings by pledges
of our stock interest in, and obtain certain guarantees from, certain of our
significant subsidiaries. In addition, this credit facility restricts us from
paying cash dividends on our capital stock, requires us to comply with other
covenants including the application of specific financial ratios and requires us
to obtain the lenders' consent for certain additional debt financing (such as
the LYONs offered hereby). We cannot assure you that the necessary acquisition
financing would be available to Vishay when required on acceptable terms. 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.
To remain successful, Vishay must continue to innovate.
Vishay's future operating results are dependent on its ability to
continually develop, introduce and market new and innovative products, to modify
existing products, to respond to technological change and to customize certain
products to meet customer requirements. There are numerous risks inherent in
this process, including the risks that Vishay will be unable to anticipate the
direction of technological change or that Vishay will be unable to develop and
market new products and applications in a timely fashion to satisfy customer
demands. If this occurs, Vishay could lose customers and experience adverse
effects on its financial condition, and results of operation.
In the past Vishay has grown through acquisition but this may not continue.
Vishay's historic growth in revenuesoperation 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 succeed in consummating
transactions with suitable acquisition candidates in the future. From time to
time, when Vishay is in the process of pursuing a strategic acquisition, Vishay
or the acquisition target may feel compelled in order to comply with applicable
law or for other reasons to announce the potential acquisition or Vishay's
desire to enter into a certain market prior to the parties' entering into formal
agreements. If an acquisition is announced and then not consummated, Vishay's
credibility in the financial markets could suffer.
Vishay expects to be substantially debt free at the end of 2000. If
Vishay were to undertake a substantial acquisition for cash, the acquisition
would likely need to be financed in
-6-
part through bank borrowings or the issuance of public or private debt. This
would decrease Vishay's ratio of earnings to fixed charges and adversely affect
other leverage criteria. We cannot assure you that the necessary acquisition
financing would be available to Vishay when required on acceptable terms.prospects.
Vishay's results are sensitive to raw material availability, quality and cost.
Many of Vishay's products require the use of raw materials which 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 operations may be
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 we use in our capacitors, are subject to
fluctuation. For periods in which the prices of these raw materials are rising
we may be unable to pass on the increased cost to our customers and thereby
experience decreased margins for the products in which they are
-17-
used. For periods in which the prices are declining, we may be required to write
down our inventory carrying cost of these raw materials which, depending on the
extent of the difference between market price and our carrying cost, could have
a material adverse effect on our net earnings. In addition, from time to time
there have been short-term market shortages of these raw materials. While these
shortages have not historically adversely affected our ability to increase
production of products containing these raw materials, they have historically
resulted in higher raw material costs for us. We cannot assure that any such
market shortages in the future would not adversely affect our ability to
increase production, particularly during periods of growing demand for our
products.
Vishay is a major consumer of the world's annual production of tantalum, a
material used in the manufacture of tantalum capacitors. There are currently
three major suppliers that process tantalum ore into capacitor grade tantalum
powder. Vishay believes that in the long term there exist sufficient tantalum
ore reserves and a sufficient number of tantalum processors to satisfy demand.
However,The market prices of tantalum ore are currently declining. Depending on the
extent of this trend, we could be required to write down the carrying cost of
our inventory of tantalum ore, which could have a material adverse effect on our
net earnings. We made one such write-down in the short term, there may be shortagessecond quarter of tantalum powder which
could lead to increased prices that Vishay may not be able to pass on to its
customers.2001 in the
amount of $20 million.
Palladium, which isa metal used to produce multi-layer ceramic capacitors, is
currently found primarily in South Africa and Russia. Palladium is a commodity
product that is subject to price volatility. The price of palladium fluctuated
in the range of approximately $127$201 to $440$970 per troy ounce during the three years
ended December 31, 1999.2000. Since that time, itthe price of palladium has been as
high as $945$1,110 per troy ounce, and on December 19, 2000,as of August 10, 2001, it was $930approximately
$480 per troy ounce. Vishay believes
that there may be a short-term shortage of palladium, which may affect the cost
of palladium and Vishay's ability to increase production of multi-layer ceramic
capacitors to meet demand. Vishay may be unable to pass on the increased
palladium costs to its customers, which would have an adverse effect on the
margins of those products using this metal.
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. Therefore, Vishay cannot be certain the amount of its backlog
has not been overstated. Vishay's results of operations could be adversely
impacted if customers were to cancel a material portion of orders in Vishay's
backlog and this produced a significant decrease in demand for Vishay's
products.
Vishay faces intense competition in its business.
Vishay'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 -7-
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 future
increases in demand for its products.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
operation.operations and prospects.
-18-
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 andor generated in Vishay's
manufacturing processes, and employee health and safety.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, be reopened or subject to renegotiation.
InternationalRisks Related to Vishay's Operations and Sales; Restructuring to Lower Cost RegionsOutside the United States
Vishay derives a substantial amount of its revenues from outside the United
States.
Approximately 71%56% of Vishay's revenues during 19992000 were derived from sales
to customers outside the United States. Vishay's operating results could be
adversely affected by currency exchange rate fluctuations, regional inflation,
changes in monetary policy and tariffs, changes in local laws and regulations in
foreign jurisdictions other than the U.S., international trade restrictions,
intergovernmental disputes, local laws that increase labor costs and reduction
or cancellation of government grants, tax benefits or other incentives.
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 U.S., 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 -8-
Vishay's 1999 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.
-19-
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, Portugal, the
Czech Republic, Taiwan and the People's Republic of 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. Such
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.
For example, during 1998, restructuring
costs were particularly high as a result of Vishay's accelerated effort to
streamline operations in response to the continued weakness in the international
electronic components market at the time.
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.
The Class B Common StockRisks Related 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 holders of the Class B common stock hold 56.8%54.1% of the
voting power of Vishay. As a result, the holders of Class B common stock are
able to cause the election of their nominees asthe entire board of directors of Vishay. The
holders of the Class B common stock may also be able to approve other actionactions 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 the holders of the Class B common stock
may make Vishay less attractive as a target for a takeover proposal. It may also
render 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.
-9--20-
VISHAY
Vishay is a leading international manufacturer and supplier of discrete
passive electronic components and discreteRisk Factors Relating to the LYONs
An active electronic components,
particularly resistors, capacitors, inductors, diodes and transistors. Passive
electronic components and discrete active electronic components are primary
elements of virtually every electronic circuit. Vishay offers its customers
"one-stop" access to onetrading market for LYONs may not develop.
Despite the fact that resales of the most comprehensive electronic component linesLYONs 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
manufacturersuch 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, 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 or Europe. Vishay manufactures oneFederal 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 broadest linesreceipt and in excess of surface mount devices,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 format for electronic components that
has evolved intoLYON
in an amount equal to the standard requireddifference between the amount realized on the sale,
purchase by most customers. Vishay also continues
to produce componentsus 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 traditional leaded form. Components manufacturedLYON. Any gain recognized by Vishay are usedyou 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
-21-
the interest previously included in virtually all typesincome, and thereafter, capital loss. A
summary of electronic products, including thosethe United States Federal income tax consequences of ownership of the
LYONS is described in this prospectus under the computer, telecommunications, military/aerospace, instrument, automotive,
medical and consumer electronics industries.
Vishay is a Delaware corporation. Its principal executive offices are
located at 63 Lincoln Highway, Malvern, Pennsylvania 19355-2120, and its
telephone number there is (610) 644-1300.
-10-heading "Certain United States
Federal Income Tax Consequences."
-22-
USE OF PROCEEDS
Unless otherwise specified inWe will not receive any of the applicable prospectus supplement,
Vishay intends to use the net proceeds from the saleresale of the securities to
refinance, in part, existing indebtedness, to finance acquisitions and for
general corporate purposes. Funds not required immediately for such purposes may
be invested temporarily in short-term marketable securities.LYONs by the
selling securityholders or of any common stock issuable upon conversion of the
LYONs.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
Vishayfor
the six months ended June 30, 2001 and for each of the periods indicated: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
SEPTEMBERSix
Months Fiscal Year Ended December 31,
Ended ------------------------------
June 30,
YEAR ENDED DECEMBER 31,
----------- ---------------------------------------------2001 2000 1999 1998 1997 1996
---- ---- ---- ---- ---- ----
2000 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges(1)........... 18.32charges .... 12.20 21.35 3.16 1.72 4.96 4.36 4.67
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(1) For the purpose of determining the ratio of earnings to fixed charges,
earnings consist of income before minority interest, income taxes and fixed
charges, less equity in net income of affiliate. Fixed charges consist of
interest expense, amortization of deferred debt issue costs and the portion of
rent expense representative of interest.
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DESCRIPTION OF THE DEBT SECURITIES
The debt securities will beLYONs
We issued the LYONs under an indenture dated as of June 4, 2001, between Vishayus
and The Bank of New York, as trustee. The following summarizes the trustee undermaterial
provisions of the LYONs and the indenture. The following descriptionsummary is subject to the
detailed provisions of the indenture, a copy of which can be obtained upon
request from Vishay. See "Where You Can Find More Information" on page 2. The
indenturenot complete
and is subject to, and governedqualified by reference to, all of the Trust Indenture Actprovisions of 1939.the
LYONs and the indenture. The statements madeindenture, 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, relatingthe 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 indenture and to thecontingent payment debt
securities to be issuedregulations under the Indenture are summaries andInternal Revenue Code. The LYONs were issued with original
issue discount for United States federal income tax purposes. (Indenture,
Section 13.14) Even if we do not purportpay 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.
(LYON, Section 5) 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. We may not reissue a LYON that has matured or been
converted, purchased by us at the option of a holder, redeemed or otherwise
cancelled, except for registration of transfer, exchange or replacement of such
LYON.
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LYONs may be complete. For a full descriptionpresented for conversion at the office of the termsconversion
agent, and for exchange or registration of transfer at the office of the
debt securities, you
should refer toregistrar, each such agent initially being the indenture,trustee.
Subordination of Lyons
Indebtedness evidenced by the LYONs is subordinated in right of payment as supplemented by any applicable supplemental
indentures.
The following is a description of the general terms and provisions of the
debt securities
set forth in the indenture, to the prior payment in full of all of our existing
and which may applyfuture 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 seriesLYONs. As a result, holders of debt securities. The particular termsLYONs may recover less,
ratably, than the holders of a seriessenior indebtedness. (Indenture, Section 10.02)
In addition, no payment of debt securities and the extent, ifprincipal 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 which these general terms do not apply to such debt
securities, will bethe 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 supplemental indenturepayment 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 prospectus supplementdefault with respect
to the senior indebtedness is cured or waived or (b) in the case of default
described in (ii) above, 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 particular seriessame default on the same
issue of debt securities. See
"Prospectus Supplements" below. Accordingly, for a descriptionsenior indebtedness shall not be effective to prevent the payment or
acquisition of the termsLYONs as provided above. (Indenture, Section 10.04) In the
event that the LYONs are declared due and provisionspayable prior to their stated maturity
by reason of the occurrence of any particular seriesevent of debt securities, you must referdefault, then Vishay will be
obligated to both
this description and the descriptionnotify promptly holders of senior indebtedness of such
particular series containedacceleration. 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 applicable prospectus supplement.
Generalterms of
the indenture otherwise permit payment at that time. (Indenture, Section 10.04)
The debt securities will be direct, unsecuredterm "senior indebtedness" of Vishay means, the principal, premium (if
any) and unpaid interest on all present and future:
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. indebtedness of Vishay for borrowed money;
. obligations of Vishay and
rank equally with other unsecuredevidenced by bonds, debentures, notes or
similar instruments;
. all obligations of Vishay for money borrowed.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 debt securities will beLYONs are effectively subordinated to all existing and future
indebtedness and other liabilities (including trade payables) of Vishay'sour subsidiaries. Vishay's rights and
the rightsAny right of its creditors, including holders of debt securities,ours to
participate in any distribution of the assets of any subsidiaryof our subsidiaries upon
a liquidation,
or reorganization or otherwiseinsolvency of such subsidiary (and the consequent
right of the Holders of the LYONs to participate in those assets) will be
effectively
subordinatedsubject to the claims of the subsidiary's creditors (including trade creditors) of such
subsidiary, except to the extent that Vishay or any of its creditors may itself beour claims as a creditor of that subsidiary.
The indenture does not limit other indebtedness or securities whichsuch
subsidiary may be incurred or issuedrecognized, 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. (Indenture, Section
10.02)
There is no restriction under the indenture on Vishay or any of its
subsidiaries incurring additional indebtedness, including senior indebtedness.
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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 contain financialbefore 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)
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. (LYON, Section 10) 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:
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. 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 restrictionstaxes. (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 33); 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). (Indenture, Section
11.08) "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 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
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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 the event we elect to make a distribution described in the third or
fourth bullet of the second preceding paragraph, then the Company 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. The
Company 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.
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 anyanother 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 its subsidiaries. There are no
covenants or provisions containedthe LYONs may, in certain circumstances, be deemed to have
received a distribution subject to United States Federal income tax as a
dividend in the indentureamount of:
. a taxable distribution to holders of shares of common stock which
affordresults 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 debt securities protectionLYONs 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)
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The amount of contingent interest payable during any six-month period will
be the sum of any contingent interest payable in the eventfirst 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 highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving Vishay.
The consummation of any highly leveraged transaction, reorganization,
restructuring, merger or similar transaction could cause a material declineLYON for the five trading day period referred to in the
credit qualityimmediately preceding paragraph and (2) the sum of any outstanding debt securities.
Debt securities may be issued either in certificated, fully registered
form, without coupons, or as global notes under a book-entry system. See
"Book-Entry, Delivery and Form" below. Upon receipt of an authentication order
from Vishay together with any other documentation requiredall regular cash dividends
paid by us per share on our common stock during such three-month period
multiplied by the indenture,number of shares of common stock issuable upon conversion of a
LYON at the trustee will authenticate debt securities in the form and amount required by the
supplemental indenture relating to the series of debt securities.
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Principal and premium,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 debtgrowth 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)
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Upon determination that LYON holders will be transferableentitled 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
exchangeable without any service charge,publish such information on our web site as soon as practicable. (LYON, Section
3)
Purchase of LYONs by Vishay at the officeOption of the trustee. VishayHolder
On June 4, 2004, 2006, 2011 and 2016, holders may require paymentus 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 sum sufficientLYON will be:
. $602.77 per LYON on June 4, 2004;
. $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 coverthe 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 other governmental charge payable in connection with any such transfercombination thereof, see
"Certain United States Federal Income Tax Consequences--Sale, Exchange,
Conversion or exchange.
The indenture does not limit the aggregate principal amount of debt
securities which may be issued thereunder.
Prospectus Supplements
The following terms of and information relating to a particular series of
debt securities offered pursuant to this documentRedemption."
We will be set forthrequired 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
applicable prospectus supplement:
o the titleregister of the debt securities
oregistrar, and to beneficial owners as required by applicable
law, stating among other things:
. whether we will pay the aggregate principal amountpurchase 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)
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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 debt securities
o the date or dates on which principal of, and premium, if any,
on the debt securities is payable
o the rate at which the debt securities shall bear interest, if
any, or the method by which the interest rate willholder's LYONs to be determined
o the date or dates from which interest will accrue and on which
interest will be payable and any related record dates any
redemption, repayment or sinking fund provisions
o the terms, if any, upon which the debt securities may be
convertible into or exchangeddelivered for
securities of any kind of
Vishay or of any other issuer or obligor and the terms and
conditions upon which such conversion or exchange shall be
effected
o the terms, if any, upon which the debt securities may be
subordinated to any other indebtedness of Vishay
o the denominations in which the debt securities will be
issuable
o any applicable material income tax considerations
o if other than the principal amount of the debt securities,purchase;
. the portion of the principal amount due upon acceleration
oat 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 debtholder 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;
. 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
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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)
-33-
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
. any necessary qualification or registration under applicable state
securities law or the availability of an exemption from such
qualification and registration. (Indenture, Section 3.08)
If these conditions are not satisfied with respect to a holder prior to the
close of business on the purchase date, we will be issuedrequired 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 formfirst sentence of this paragraph.
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. (Indenture, Section 3.13)
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)
-34-
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 with respect to Vishay, 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 globaltrigger 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;
. 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;
-35-
. 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
successors to those schedules) stating that they have become and
actually are beneficial owners of our voting stock representing more
than 80% or more, in the aggregate, of the voting power of Vishay's
common stock and Class B common stock or other capital stock
-36-
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)
The indenture does not permit our board of directors to waive our
obligation to purchase LYONs at the option of holders in the event of the
occurrence of a trigger event.
In connection with any purchase offer in the event of the occurrence of a
trigger event, we will to the extent applicable:
-37-
. 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. (Indenture, Section 3.13)
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.
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 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.
-38-
(1) (2) (3)
LYON Accrued Original Redemption Price
---- ---------------- ----------------
Redemption Date Issue Price Issue Discount (1) & (2)
----------------- ---------- -------------- ---------
June 4, 2006 .................... $ 551.26 $ 88.50 $ 639.76
2007 .................... 551.26 107.84 659.10
2008 .................... 551.26 127.76 679.02
2009 .................... 551.26 148.28 699.54
2010 .................... 551.26 169.43 720.69
2011 .................... 551.26 191.21 742.47
2012 .................... 551.26 213.65 764.91
2013 .................... 551.26 236.77 788.03
2014 .................... 551.26 260.59 811.85
2015 .................... 551.26 285.13 836.39
2016 .................... 551.26 310.41 861.67
2017 .................... 551.26 336.45 887.71
2018 .................... 551.26 363.28 914.54
2019 .................... 551.26 390.92 942.18
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)
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 hereof 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;
-39-
(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 5 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 5
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 5 percent of such income of Vishay and its
subsidiaries consolidated as of the end of the most recently completed
fiscal year.
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
-40-
and interest on any defaulted interest as more fully described on p. 30 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), 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 securities
-13-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
-41-
orespective 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 includingor provisions in the indenture which may not be
modified without the consent of each holder of LYONs as 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 restrictive covenants,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
debt securities providedLYONs and under the indenture; and
. Vishay or such successor person shall not immediately thereafter be
in an applicabledefault 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.
-42-
However, without the consent of each holder, no supplemental indenture o if applicable,may,
among other actions:
. alter the termsmanner 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)
Without the consent of any holder of LYONs, we and conditions pursuantthe trustee may enter
into supplemental indentures for any of the following purposes:
. to which
Vishay can discharge certainevidence 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 respectthe 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 seriesambiguity or inconsistency in the indenture; and
. to make any change that does not affect the rights of debt securitiesthe 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)
-43-
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, funds in an amountthe paying agent or the conversion agent, if
applicable, after the LYONs have become due and payable, whether at stated
maturity, or any redemption date, or any purchase date, or 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 at
maturity or upon redemption the principal, premium and
interest on such debt securities
o any other specific termsall of the
debt securities
o ifoutstanding 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, namedand 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.
-44-
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 identity
of any trustees, paying agents or registrars with respect to
the debt securitiesLYONs.
Book-Entry Delivery and FormSystem
The Global Notes
A series of debt securities may beLYONs have been issued in whole or in partonly in the form of one or more global securities held in
book-entry form. DTC or its nominee is the sole registered holder of the LYONs
for all purposes under a book-entry system. Each global
security:
o will be deposited with, or on behalfthe indenture. Owners of The Depository Trust
Company, and registeredbeneficial interests in the
name of Cede & Co., as DTC's
nominee, or
o will remain inLYONs represented by the custody of the trusteeglobal securities hold their interests pursuant to the
procedures and practices of DTC. (Indenture, Section 2.01(a)) As a FAST
Balance Certificate Agreement between DTCresult,
beneficial interests in any such securities are shown on, and the trustee.
Certain Book-Entry Procedures for the Global Notes
The descriptions of the operations and procedures of DTC set forth belowtransfers are
provided solely as a matter of convenience. These operations and procedures
are solely within the control ofeffected 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 subjectexchanged for certificated securities as
described in the next section (and then except to changethe extent they have been so
exchanged), the procedures described in this prospectus, the LYONs, the
indenture and such other documents relating to the conversion of LYONs, the
surrender of LYONs for repurchase or payment, identification of LYONs by
them from timecertificate number and similar matters will be relevant only to time.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 takes no responsibilityand 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 these
operationscertificated 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 procedures,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 investors are urgeda successor
depositary is not appointed by us within 90 days;
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. we decide to contactdiscontinue use of the system of book-entry transfer
through DTC (or any successor depositary); or
If an event of default under the indenture occurs and is continuing then
DTC may, at its participants directly to discuss these matters.discretion, exchange LYONs for global securities. (Indenture,
Section 2.12)
About DTC
DTC has advised Vishay that it is:
ous as follows: DTC is a limited purposelimited-purpose trust company
organized under the laws of
the State of New York oBanking Law, a "banking organization" within the
meaning of the New York Banking Law,
o a member of the Federal Reserve System,
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o a "clearing corporation" within the meaning of Article 8 of
the Uniform Commercial Code, and
o a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act.
DTC was created to hold securities for its participants and facilitates the clearance and settlement of securities transactions betweenamong its participants
through electronic computerized book-entry changes to thein participants' accounts, of its participants,
thereby
eliminating the need for physical transfer and deliverymovement of securities certificates. DTC's
participants include securities brokers and dealers, banks, and trust companies,
clearing corporations and certain other organizations.organizations, some of whom and/or their
representatives own DTC. Access to DTC's book-entry system is also available to
indirect participantsothers, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. Investors who
are not participants may beneficially own securities held by or on behalf of DTC
only through DTC participants or indirect participants.
Vishay expects that pursuant to procedures established by DTC:
1. upon the deposit of global notes representing debt securities
with DTC, DTC will credit the accounts of its participants with an
interest in the global notes. The accounts to be credited will be
designated by the underwriters or agents, if any, or by Vishay, if such
debt securities were offered and sold directly by Vishay; and
2. ownership of the debt securities will be shown on, and the
transfer of ownership thereof will be effected only through, records
maintained by DTC, with respect to the interests of its participants, and
the records of DTC's participants and indirect participants, with respect
to the interests of other owners of beneficial interest in the debt
securities.
The laws of some jurisdictions may require that certain purchasers of
securities take physical delivery of such securities in definitive form.
Accordingly, the ability to transfer interests in the debt securities
represented by global notes to such persons may be limited. In addition, because
DTC can act only on behalf of its participants, who in turn act on behalf of
persons who hold interests through a DTC participant, the ability of a person
having an interest in debt securities represented by a global note to pledge or
transfer such interest to persons or entities that do not participate in DTC's
system, or to otherwise take actions in respect of such interest, may be
affected by the lack of a physical definitive security in respect of such
interest.
So long as DTC or its nominee is the registered owner of a global note,
DTC or such nominee, as the case may be, will be considered the sole owner or
holder of the debt securities represented by the global note for all purposes
under the indenture. Except as provided below, owners of beneficial interests in
a global note will not be entitled to have debt securities represented by such
global note registered in their names, will not receive or be entitled to
receive physical delivery of certificated debt securities, and will not be
considered the owners or holders thereof under the indenture for any purpose.
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Payments with respect to the principal of, and premium, if any, and
interest on, any debt securities represented by a global note registered in the
name of DTC or its nominee on the applicable record date will be payable by the
trustee to or at the direction of DTC or its nominee in its capacity as the
registered holder of the global note representing such debt securities under the
indenture. Under the terms of the indenture, Vishay and the trustee may treat
the persons in whose names the global notes are registered as the owners thereof
for the purpose of receiving payment thereon and for any and all other purposes
whatsoever. Consequently, neither Vishay nor the trustee nor any agent of Vishay
or the trustee has or will have any responsibility or liability for:
o any aspect of DTC's records or any participant's or indirect
participant's records relating to, or payments made on account
of, any beneficial ownership interest in the global notes of
any series, or for maintaining, supervising or reviewing any
of DTC's records or any participant's or indirect
participant's records relating to the beneficial ownership
interests of the global notes of such series; or
o any other matter relating to the actions and practices of DTC
or any of its participants or indirect participants.
DTC has advised Vishay that its current practice, upon receipt of any
payment in respect of securities such as the notes including principal and
interest, is to credit the accounts of the relevant participants with the
payment on the payment date, in amounts proportionate to their respective
holdings in the principal amount of beneficial interest in the relevant security
as shown on the records of DTC, unless DTC has reason to believe it will not
receive payment on such payment date. Payments by the participants and the
indirect participants to the beneficial owners of either series of notes will be
governed by standing instructions and customary practices and will be the
responsibility of the participants or the indirect participants and will not be
the responsibility of DTC, the trustee, or Vishay. Neither Vishay nor the
trustee will be liable for any delay by DTC or any of its participants in
identifying the beneficial owners of the notes, and the Company and the trustee
may conclusively rely on and will be protected in relying on instructions from
DTC or its nominee for all purposes.
Certificated Debt Securities
If:
1. Vishay notifies the trustee in writing that DTC is no longer
willing or able to act as a depositary or DTC ceases to be registered as a
clearing agency under the Exchange Act and a successor depositary is not
appointed within 90 days of such notice or cessation,
2. Vishay, at its option, notifies the trustee in writing that
it elects to cause the issuance of debt securities in definitive form
under the indenture, or
3. upon the occurrence of certain other events as provided in
the Indenture, then,
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upon surrender by DTC of the global notes representing the debt securities,
certificated debt securities will be issued in the names and denominations
requested by DTC in accordance with its customary procedures. Upon any such
issuance, the trustee is required to register the certificated debt securities
in the names of the designated persons, or their nominees, and cause the
certificates to be delivered to them.
Neither Vishay nor the trustee shall be liable for any delay by DTC or
any DTC participant or indirect participant in identifying the beneficial owners
of the related debt securities and each such person may conclusively rely on,
and shall be protected in relying on, instructions from DTC for all purposes.
Merger, Consolidation, Sale or Conveyance
The indenture provides that Vishay will not merge or consolidate with any
other corporation or person and will not sell or convey all or substantially all
of its assets to any person, unless:
1. Vishay is the continuing corporation, or
2. the successor corporation or person that acquires all or
substantially all of the assets of Vishay, shall expressly assume,
o the payment of principal of, premium, if any, and interest on
all debt securities issued under the indenture, and
o the observance of all the covenants and agreements under the
indenture to be performed or observed by Vishay,
and in either case, immediately after such merger, consolidation, sale or
conveyance, Vishay, or such successor corporation or person, as the case may be,
shall not be in default in the performance of the covenants and agreements of
the indenture to be performed or observed by Vishay.
Events of Default
An event of default with respect to a series of debt securities issued
under the indenture is defined in the indenture as being:
o a default for 30 days in payment of any interest on any debt
securities of such series;
o a default in any payment of principal of, or sinking fund
installment, if any, on, any debt securities of such series;
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o a default by Vishay in performance of any other of the
covenants or agreements in respect of the debt securities of
such series or the indenture that continues for 90 days after
Vishay has been given notice of such failure in accordance
with the indenture;
o certain events involving bankruptcy, insolvency or
reorganization of Vishay.
The indenture provides that the trustee shall transmit notice of any
uncured default under the indenture with respect to any series of debt
securities issued thereunder, within 90 days after the occurrence of such
default, to the holders of the debt securities of each affected series, except
that the trustee may withhold notice to the holders of any series of debt
securities of any default, except in payment of principal of, premium, if any,
or interest on such series, if the trustee considers it in the interest of the
holders of such series of debt securities to do so.
If an event of default due to:
o the default in payment of interest, principal or sinking fund
installment with respect to any series of debt securities
issued under the indenture, or
o the default in the performance or breach of any other covenant
or agreement of Vishay applicable to such series but not
applicable to all outstanding debt securities issued under the
indenture,
shall have occurred and be continuing, either the trustee or the holders of not
less than 25% in principal amount of the debt securities of such series then
outstanding may declare the principal of all debt securities of such series and
interest accrued thereon to be due and payable immediately.
If an event of default due to:
o a default in the performance or breach of any other of the
covenants or agreements of Vishay applicable to all
outstanding debt securities issued under the indenture;
o certain events of bankruptcy, insolvency and reorganization of
Vishay,
shall have occurred and be continuing, either the trustee or the holders of not
less than 25% in principal amount of all debt securities issued under the
indenture and then outstanding, treated as one class, may declare the principal
of all such debt securities and interest accrued thereon to be due and payable
immediately.
Upon certain conditions, such declarations may be annulled and past
defaults may be waived by the holders of a majority in principal amount of the
outstanding debt securities of an affected series, voting as a separate class,
or all debt securities outstanding under the indenture, voting as a single
class, as the case may be. Past defaults may be waived in this manner only if
-18-
Vishay has paid all previously matured interest and principal payments, other
than payments that became due by acceleration.
The holders of a majority in principal amount of the outstanding debt
securities of each affected series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
trustee with respect to the debt securities of such series, subject to certain
limitations specified in the indenture.
The indenture provides that no holder of debt securities of any series
may institute any action against Vishay under the indenture, except actions for
payment of overdue principal, premium, if any, or interest, unless such holder
previously shall have given to the trustee written notice of default and
continuance thereof and unless the holders of not less than 25% in principal
amount of the debt securities of such series then outstanding shall have
requested the trustee to institute such action and shall have offered the
trustee reasonable indemnity, and the trustee shall not have instituted such
action within 60 days of such request, and the trustee shall not have received
direction inconsistent with such request by the holders of a majority in
principal amount of the debt securities of such series then outstanding.
The indenture requires the annual filing by Vishay with the trustee of a
written statement as to compliance with the covenants and agreements contained
in the indenture.
Modification of the Indenture
The indenture contains provisions permitting Vishay and the trustee, with
the consent of the holders of not less than a majority of the principal amount
of all affected series of the debt securities issued under the indenture at the
time outstanding, voting as one class, to modify the indenture or any
supplemental indenture or the rights of the holders of the debt securities of
such series. Without the consent of the holder of each debt security affected,
the indenture cannot be modified to:
1. extend the final maturity of any of the debt securities or
reduce the principal amount thereof, or reduce the rate or extend the
time of payment of interest thereon, or reduce any amount payable on
redemption thereof, or reduce the amount of any original issue discount
security payable upon acceleration or provable in bankruptcy or impair or
affect the right of any holder of the debt securities to institute suit
for the payment thereof, or
2. alter the requirement that, the consent of the holders of each
debt security affected is required for any such modification.
The indenture contains provisions permitting Vishay and the trustee,
without the consent of any holders of debt securities, to enter into a
supplemental indenture, among other things, for purposes of
-19-
o curing any ambiguity,
o correcting or supplementing any provision contained in the
indenture or in any supplemental indenture or making other
provisions in regard to the matters or questions arising
under the indenture or any supplemental indenture as the
Board of Directors of Vishay deems necessary or desirable
and which does not adversely affect the interests of the
holders of debt securities in any material respect, or
o establishing the form or terms of any series of debt
securities as are not otherwise inconsistent with any of
the provisions of the indenture.
Concerning the Trustee
The trustee may hold debt securities issued under the indenture, act as a
depository for funds of, make loans to, or perform other services for, Vishay
and its subsidiaries as if it were not the trustee.
-20-
DESCRIPTION OF CAPITAL STOCK
The aggregate number of shares of capital stock which Vishay has authority
to issue is 171,000,000 shares: 1,000,000 shares of preferred stock, par value
$1.00 per share, 150,000,000 shares of common stock, par value $.10 per share
and 20,000,000 shares of Class B common stock, par value $.10 per share. At a
special meeting of stockholders of Vishay to be held in connection with the
proposed acquisition of General Semiconductor, Vishay's stockholders will be
asked to approve an amendment to the Company's Amended and Restated Certificate
of Incorporation increasing the authorized number of shares common stock to
300,000,000 and the authorized number of shares of Class B common stock to
40,000,000. See "Summary--Recent Developments". No shares of preferred stock
have been issued. At December 19, 2000,August 10, 2001, there were 122,408,027122,432,672 shares of common
stock and 15,518,54615,506,634 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 Boardboard of
Directorsdirectors 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
-46-
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-to-oneone-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 New York Stock Exchange.NYSE. There is no public market for
shares of Company'sVishay's Class B common stock. All outstanding shares of common stock
and Class B common stock are, and upon issuance,conversion, the shares of common stock
to be sold hereunderissuable 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.
-21-
American Stock Transfer & Trust Company is the transfer agent and registrar
of Vishay's common stock and Class B common stock.
-47-
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.
-48-
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
. 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.
-49-
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
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.
-50-
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.
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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.
-52-
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 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
-53-
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.
-54-
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 August 15, 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.
-55-
- ----------------------------------------------------------------------------------------------------------------------
Number of
Aggregate Principal Shares of common Percentage of
Amount at Maturity Percentage of stock Shares of
of LYONs that May LYONs that May common stock
Name Be Sold Outstanding Be Sold (1) Outstanding (2)
- ----------------------------------------------------------------------------------------------------------------------
R 2 Investments, LDC $36,500,000 6.64% 644,904 *
- ----------------------------------------------------------------------------------------------------------------------
Deutsche Banc Alex Brown Inc. $95,000,000 17.27% 1,678,517 1.4%
- ----------------------------------------------------------------------------------------------------------------------
First Union International Capital
Markets Inc. $19,000,000 3.45% 335,703 *
- ----------------------------------------------------------------------------------------------------------------------
SG Cowen Securities Corporation $22,500,000 4.09% 397,544 *
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
All Other Holders of LYONs or
Future Transferees, Pledgees,
Donees, Assignees or Successors of
any such Holders(3)(4) $377,000,000 68.55% 6,661,062 5.2
- ----------------------------------------------------------------------------------------------------------------------
Total $550,000,000 100% 9,717,730 7.4
- ----------------------------------------------------------------------------------------------------------------------
* 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
122,432,672 shares of common stock outstanding as of August 10, 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 other selling securityholders will be set forth in
prospectus supplements, if required.
(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.
-56-
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.
-57-
PLAN OF DISTRIBUTION
VishayWe 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 securitiesall 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 dealers, and
alsoagents, who may sell securities directly to otherreceive
compensation in the form of discounts, commissions or concessions
from the selling securityholders or from the purchasers or through agents. Each
prospectus supplement will describe the method of distribution of the
offered
securities.LYONs and shares of common stock for whom they may act as agent.
The distributionLYONs and shares of the securitiescommon stock may be effectedsold from time to time in
one or more transactions at aat:
. fixed price or prices, which may be changed, or atchanged;
. prevailing market prices prevailingat 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, at prices related toincluding the New York Stock Exchange in the
case of shares of common stock;
. in the over-the-counter market;
-58-
. in transactions otherwise than on such prevailing market pricesexchanges or at negotiated prices.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.
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 underwriterscovered by this prospectus that qualify for sale pursuant to Rule 144
or Rule 144A of the Securities Act may receive
compensation from Vishaybe sold under Rule 144 or from purchasersRule 144A
rather than pursuant to this prospectus.
The outstanding shares of securitiescommon stock are listed for whom they may act
astrading on the
New York Stock Exchange.
The selling securityholders and any broker and any broker-dealers,
agents in the form of discounts, concessions, or commissions. Underwriters
may sell securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions, or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Dealers, and agents that participate with the selling securityholders in the
distribution of securitiesthe LYONs or shares of common stock may be deemed to be
underwriters, and"underwriters" within the meaning of the Securities Act. In this case, any discounts or
commissions received by them from Vishaythese broker-dealers, agents or underwriters and any
profit on the resale of securitiesthe LYONs or shares of common stock purchased by them
may be deemed to be underwriting commissions or discounts and commissions, under the Securities
Act of
1933, as amended. Any such underwriter or agent will be identified, andAct. In addition, any such
compensation received from Vishay will be described, inprofits realized by the prospectus
supplement.
Underwriters and agents who participate in the distribution of securitiesselling securityholders may be
entitled under agreements which maydeemed to be entered intounderwriting 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 Vishaythe Initial Purchaser to indemnification by Vishay against certain liabilities, including liabilitiesbe "qualified institutional buyers," as defined in
Rule 144A under the Securities Act of 1933,Act. We have agreed to indemnify Merrill Lynch,
as amended.
If so indicatedthe 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 the applicable prospectus supplement, Vishay will
authorize underwriters or other persons acting as Vishay's agents to solicit
offers by certain institutions to purchase offered securities from Vishay
pursuant to contracts providing for payment and delivery on a future date.
Institutions with which such
contracts may be made include:
o commercial and savings banks,
o insurance companies,
o pension funds,
o investment companies, and
o educational and charitable institutions and others,
but in all cases such institutions must be approved by Vishay. The obligations
of any purchaser under any such contractdistribution will be subject to the condition thatExchange Act. The Exchange Act rules
include, without limitation, Regulation M, which may limit the purchasetiming of
purchases and sales of any of the offeredLYONs and the underlying
-59-
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 shallregistered thereunder;
. the expiration of the holding period applicable to the securities
held by persons that are not at the time of delivery be
prohibitedour affiliates under Rule 144(k)
under the lawsSecurities 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 jurisdictionLYONs and shares of common stock pursuant to the registration
statement to which such
-22-
purchaser is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.this prospectus relates.
LEGAL MATTERS
Certain legal matters regarding the securities have beenLYONs 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,
1999,2000, 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.
-23--60-
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ItemITEM 14. Other ExpensesOTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The Registrant is paying all of Issuancethe selling securityholders' expenses
related to this offering, except that the selling securityholders will pay any
applicable broker's commissions and Distributionexpenses. The estimatedfollowing table sets forth the
approximate amount of fees and expenses payable by the Registrant in connection
with this Registration Statement and the issuance and distribution of the Securities covered by this registration statement are as follows:LYONs and shares of
common stock registered hereby.
SEC registration fee (actual)......................... $ 208,321
Printing and engraving expenses....................... $ 200,00076,098
Legal fees and expenses...............................expenses $ 100,000
Accounting fees and expenses..........................expenses $ 50,000
Rating agencies' fees.................................30,000
Printing and engraving expenses $ 650,000
Miscellaneous...........................................30,000
Miscellaneous $ 91,679
----------10,000
---------
Total $1,300,000$ 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
-61-
be in the best interests of the corporation and was not adjudged liable to the
corporation, and, in any criminal
II - 1
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. The
VishayVishay'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.
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
and Financial Statement Schedules
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.
Certificate 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.
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 (the
"1993 Form 10-K").1993.
4.1 FormIndenture dated as of Indenture. IncorporatedJune 4, 2001 between Vishay
Intertechnology, Inc. and Bank of New York as Trustee
(incorporated by reference to Exhibit 4.1 to Registration Statement No. 333-34178Current Report of
Registrant on Form S-38-K filed on June 18, 2001 under the
Securities Exchange Act of 1933.
5.11934 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
under the Securities
-62-
Exchange Act of 1934).
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
II - 2
10.1 Amended and Restated8 Tax Opinion of Kramer Levin Naftalis & Frankel LLP
12 Statement of Vishay Intertechnology, Inc. $825,000,000
Long Term Revolving Credit Agreement, dated as of June 1, 1999,
by and among Vishay, Comerica Bank, Banc of America Securities
LLC, Credit Lyonnais New York Branch and the other banks
signatory thereto, and Comerica Bank, as administrative agent.
10.2 First Amendment to Amended and Restated Vishay Intertechnology,
Inc. Long Term Revolving Credit Agreement and Other Loan
Documents, dated as of August 31, 2000, by and among Vishay,
Comerica Bank and the other banks signatory thereto, and Comerica
Bank, as administrative agent.
10.3 Company Guaranty (Long Term), dated March 2, 1998, by Vishay
Intertechnology, Inc. to Comerica Bank, as administrative agent.
Incorporated by reference to Exhibit 10.3 to the Current Report on
Form 8-K filed on March 17, 1998.
10.4 Domestic Guaranty (Long Term), dated March 2, 1998, by the
Guarantors signatory thereto to Comerica Bank, as administrative
agent. Incorporated by reference to Exhibit 10.4 to the Current
Report on Form 8-K filed on March 17, 1998.
10.5 Foreign Guaranty (Long Term), dated March 2, 1998, by the
Guarantors signatory thereto to Comerica Bank, as administrative
agent. Incorporated by reference to Exhibit 10.5 to the Current
Report on Form 8-K filed on March 17, 1998.
12.1regarding Computation
of Ratio of Earnings to Fixed Charges
23.1 Consent of Ernst & Young LLP
23.2 Consent of Kramer Levin Naftalis & Frankel LLP (contained(included in
the
opinion filed as Exhibit 5.1 hereto)5 and Exhibit 8)
24 Powers of Attorney (contained on the signature pages hereto)
25 Statement of Eligibility of Trustee on Form T-1*
- -----------
* To be filed by amendment.
II - 3T-1
-63-
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
1.(i) To file, during any period in which offers or
sales are being made, a post-effective amendment to this registration
statement:
(i)(ii) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii)(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 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
(iii)(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.
2.(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.
3.(vi) To remove from registration by means of a post-effectivepost-
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
-64-
statement shall be deemed to be a
II - 4
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.
II - 5-65-
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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Malvern, State of Pennsylvania, on the 22nd21st day of
December, 2000.August, 2001.
VISHAY INTERTECHNOLOGY, Inc.INC.
By: /s/ Felix Zandman
-----------------------------------------------------------------------
Felix Zandman
Director, Chairman of the Board and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
constitutes and appoints FELIX ZANDMAN and AVI D. EDEN, and each of them, his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this registration statement (including all pre-effective and
post-effective amendments thereto and all registration statements filed pursuant
to Rule 462(b) which incorporate this registration statement by reference), and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on December 22,
2000August 21,
2001 in the capacities indicated below.
Signature Title
/s/Felix Zandman Director, Chairman of the Board, and
- -------------------------------------------------- Chief Executive Officer (Principal Executive
Felix Zandman Executive Officer)
/s/Avi D. Eden Director, Vice-ChairmanVice Chairman of the Board, Executive
- --------------------- Executive----------------------------- Vice President and General Counsel
Avi D. Eden
Counsel
/s/ Eli Hurvitz Director
- -----------------------------
Eli Hurvitz
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/s/ Gerald Paul Director, President and Chief Operating Officer
- --------------------- Officer----------------------------
Gerald Paul
/s/Richard N. Grubb Director, Executive Vice President, - --------------------- Treasurer and
- ---------------------------- Chief Financial Officer (Principal Financial and
Richard N. Grubb (Principal Financial and Accounting Officer)
II - 6
/s/Robert A. Freece Director, Senior Vice President
- ------------------------------------------------
Robert A. Freece
/s/Eli Hurvitz Director
- --------------------
Eli Hurvitz
/s/ Dr. Edward B. Shils Director
- ------------------------------------------------
Dr. Edward B. Shils
/s/Luella B. Slaner Director
- ------------------------------------------------
Luella B. Slaner
/s/ Ziv Shoshani Director
- ----------------------------
Ziv Shoshani
/s/ Mark I. Solomon Director
- ------------------------------------------------
Mark I. Solomon
/s/Jean-Claude Tine Director
- ------------------------------------------------
Jean-Claude Tine
II-67-
/s/ Marc Zandman
- 7---------------------------- Director
Marc Zandman
/s/ Ruta Zandman
- ---------------------------- Director
Ruta Zandman
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