As filed with the Securities and Exchange Commission on October 3, 2003
Registration No. 333-102507
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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VISHAY INTERTECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 3670 38-1686453
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Identification
Code Number) Number)
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Avi D. Eden
Vishay Intertechnology, Inc.
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)
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Copy to:
Abbe L. Dienstag, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
(212) 715-9100
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
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Approximate Date of Commencement of Proposed Sale to the Public: From time to
time after the effective date of this Registration Statement.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
|-|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
Proposed
Title of each class of Amount to Offering Maximum Amount of
securities to be be Price Aggregate Registration
registered Registered (1) Per Unit Offering Price Fee (2)
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Common Stock, par value
$0.10 per share (3)..... 6,176,467 $12.38 (4) $76,464,661.46 $7,034.75
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Class A Warrants to
purchase Common Stock,
at an exercise price of
$20.00 per share........ 7,000,000 -- (5) -- (5) -- (5)
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Class B Warrants to
purchase Common Stock,
at an exercise price of
$30.30 per share........ 1,823,529 -- (5) -- (5) -- (5)
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Common Stock, par value
$0.10 per share (6) .... 7,000,000 $20.00 $140,000,000.00 $11,326.00
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Common Stock, par value
$0.10 per share (6) .... 7,000,000 -- (7) -- (7) -- (7)
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Common Stock, par value
$0.10 per share (8) .... 1,823,529 $30.30 $55,525,628.70 $4,492.02
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Common Stock, par value
$0.10 per share (8) .... 1,823,529 -- (9) -- (9) -- (9)
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(1) Pursuant to Rule 416 of the Securities Act of 1933, this registration
statement also covers such additional shares that may be issued as a
result of a change in the amount of securities being offered or issued
to prevent dilution resulting from stock splits, stock dividends or
similar transactions.
(2) A filing fee in the amount of $19,709.64 was previously paid upon the
initial filing of this registration statement on January 14, 2003.
(3) Issuable upon exchange of Vishay's $105,000,000 Floating Rate
Unsecured Loan Notes Due 2102.
(4) Pursuant to Rule 457(c), and solely for the purpose of calculating the
registration fee, the proposed maximum offering price per share is
calculated based upon the average of the high and low prices per share
of the Registrant's common stock as reported on the New York Stock
Exchange on January 10, 2003, a date that is within five business days
prior to January 14, 2003, the date of initial filing of this
registration statement.
(5) Pursuant to Rule 457(g) of the Securities Act of 1933, as amended, no
separate registration fee is required with respect to the Class A
Warrants or the Class B Warrants as they are being registered in the
same registration statement as the common stock underlying the
warrants.
(6) Pertains to the registration of the issuance of shares of common stock
issuable upon exercise of the Class A Warrants, for which the exercise
price is $20.00 per share of common stock.
(7) Pertains to the registration of shares of common stock underlying the
Class A Warrants registered hereunder to the extent the registration
referred to in (6) is unavailable under the circumstances and the
shares are sold in an underwritten offering. No separate registration
fee is required with respect to the shares of common stock underlying
the Class A Warrants.
(8) Pertains to the registration of shares of common stock issuable upon
exercise of the Class B Warrants, for which the exercise price is
$30.30 per share of common stock.
(9) Pertains to the registration of shares of common stock underlying the
Class B Warrants registered hereunder to the extent the registration
referred to in (8) is unavailable under the circumstances and the
shares are sold in an underwritten offering. No separate registration
fee is required with respect to the shares of common stock underlying
the Class B Warrants.
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The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Preliminary Prospectus, Subject to Completion, dated October 3, 2003
(Vishay logo)
Vishay Intertechnology, Inc.
Class A Warrants to purchase 7,000,000 shares of Common Stock
Class B Warrants to purchase 1,823,529 shares of Common Stock
6,176,467 shares of Common Stock issuable upon exchange of
$105,000,000 Floating Rate Unsecured Loan Notes Due 2102
8,823,529 shares of Common Stock issuable upon exercise of
the Class A Warrants and the Class B Warrants
This prospectus will be used by the selling securityholders to resell all
or a portion of the following securities issued in connection with our
acquisition of BCcomponents Holdings, B.V. in December 2002:
o Class A Warrants to purchase up to 7,000,000 shares of our common
stock at an exercise price of $20.00 per share;
o Class B Warrants to purchase up to 1,823,529 shares of our common
stock at an exercise price of $30.30 per share;
o Up to 6,176,467 shares of our common stock issuable upon exchange of
our floating rate unsecured loan notes due 2102 in the principal
amount of $105,000,000 (or any replacement notes issued in
connection with any spin-off transaction); and
o Up to 8,823,529 shares of our common stock issuable upon exercise of
the warrants, but only by the initial holders of the warrants and
their affiliates or in an underwritten public offering.
In addition, this prospectus covers the issuance of up to 8,823,529 shares
of our common stock upon the exercise of the class A warrants or the class B
warrants by the holders of these warrants, including the initial holders of the
warrants and their affiliates. The initial holders of the warrants and their
affiliates may not exercise the warrants before the first anniversary of the
date the warrants were issued, but purchasers of the warrants from the initial
holders or their affiliates may exercise the warrants at any time.
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Our shares of common stock trade on the New York Stock Exchange under the
symbol "VSH". On October 2, 2003, the last sale price of the shares as reported
on the New York Stock Exchange was $18.00 per share.
Investing in our securities involves risks that are described in the "Risk
Factors" section beginning on page 4 of this prospectus.
We will not receive any cash proceeds from sale of the selling
securityholders' securities, but we will receive the proceeds from the exercise
of the warrants.
Neither the Securities and Exchange Commission, any state securities
commission nor any other regulatory body has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is , 2003.
The information in this prospectus is no complete and my be changed. We 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 it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
Important Notice about the Information Presented in this Prospectus
You should rely only on the information contained or incorporated by
reference in this prospectus. We have 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. We are 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.
TABLE OF CONTENTS
PROSPECTUS SUMMARY...........................................................1
FORWARD LOOKING INFORMATION..................................................3
RISK FACTORS.................................................................4
USE OF PROCEEDS..............................................................9
DESCRIPTION OF CAPITAL STOCK................................................10
DESCRIPTION OF THE WARRANTS.................................................12
SELLING SECURITYHOLDERS.....................................................25
PLAN OF DISTRIBUTION........................................................27
LEGAL MATTERS...............................................................30
EXPERTS.....................................................................30
WHERE YOU CAN FIND MORE INFORMATION.........................................30
i
PROSPECTUS SUMMARY
You should read this entire prospectus, including the information set
forth under "Risk Factors" and the information incorporated by reference in this
prospectus. As used in this prospectus, "Vishay," "company," "we," "us" and
"our" refer to Vishay Intertechnology, Inc. and its consolidated subsidiaries,
unless otherwise specified.
Vishay Intertechnology, Inc.
Vishay is a leading international manufacturer and supplier of passive and
active electronic components. Passive components include resistors, capacitors
and inductors. Vishay's offering of active components includes discrete
semiconductors, diodes, rectifiers, infrared data communications devices and
power and analog switching circuits. Passive electronic components and discrete
active electronic components, along with integrated circuits, are the primary
elements of every electronic circuit. Vishay gives its customers "one-stop"
access to one of the most comprehensive electronic component lines of any
manufacturer in the United States or Europe. Components manufactured by Vishay
are used in virtually all types of electronic products, including those in the
industrial market and the automotive, consumer electronics, telecommunications,
electronics manufacturing services, computer and military/aerospace industries.
Vishay employs over 25,000 people and has plants in seventeen countries.
Vishay is a Delaware corporation. Our principal executive offices are
located at 63 Lincoln Highway, Malvern, Pennsylvania 19355-2120, and our
telephone number there is (610) 644-1300.
Vishay has two classes of stock: common stock that has one vote per shares
and Class B common stock that has 10 votes per share. Only the common stock is
publicly traded. The Class B common stock is privately held. All references in
this prospectus to common stock are to Vishay's publicly traded common stock and
not to the Class B common stock.
The Offering
In connection with our acquisition of BCcomponents Holdings, B.V. in
December 2002, we acquired all of the outstanding shares of BCcomponents
Holdings B.V. in exchange for class A warrants and class B warrants to acquire
an aggregate of 8,823,529 shares of our common stock. In addition, in connection
with the acquisition, $105 million in principal amount of BCcomponents'
mezzanine indebtedness and certain other securities of BCcomponents were
exchanged for $105 million principal amount of our floating rate unsecured notes
due 2102. We entered into a put and call agreement related to the notes. In
addition, we granted to the recipients of the notes and the warrants certain
registration rights. This prospectus has been prepared, and the registration
statement of which this prospectus is a part has been filed with the Securities
and Exchange Commission, to satisfy our obligations to the recipients of the
notes and the warrants. Accordingly, this prospectus covers:
o the resale by selling securityholders of the class A warrants and
the class B warrants;
o the resale by selling securityholders of shares of our common stock
issuable upon exchange of the notes;
o the resale by selling securityholders of shares of our common stock
issuable upon exercise of the warrants, but only by the initial
holders of the warrants or their affiliates or in an underwritten
public offering where the warrants are exercised in connection with
the offering, or in certain other circumstances; and
o the issuance by us of shares of our common stock upon exercise of
the warrants by holders.
For a description of our acquisition of BCcomponents, see our Current
Report on Form 8-K filed December 23, 2002 and our Current Report on Form 8-K/A
filed February 26, 2003.
Investing in our securities involves risks. You should carefully consider
the information under "Risk Factors" beginning on page 4 and the other
information included in this prospectus before investing in our securities.
Warrants
The class A warrants give the holders the right to purchase up to an
aggregate of 7,000,000 shares of our common stock at an exercise price of $20.00
per share. The class B warrants give the holders the right to purchase up to an
aggregate of 1,823,529 shares of our common stock at an exercise price of $30.30
per share. Both the number of shares for which the class A warrants and the
class B warrants are exercisable and their respective exercise prices are
subject to specified anti-dilution and transactional adjustments. The class A
warrants and the class B warrants each have a 10-year term expiring on December
13, 2012.
The warrants may be exercised at any time from and after the date the
warrants were issued until the expiration date by any holder other than an
initial holder of the warrants or an affiliate of an initial holder. The
warrants may be exercised at any time from and after December 13, 2003, the
first anniversary of the date the warrants were issued, until the expiration
date by an initial holder of the warrants or an affiliate of an initial holder.
Pursuant to a securities investment and registration rights agreement that
we entered into at the time of our acquisition of BCcomponents, we agreed to
register the class A warrants and the class B warrants held by the selling
securityholders together with the shares of our common stock issuable upon
exercise of the class A warrants and the class B warrants pursuant to the
Securities Act of 1933, as amended, to facilitate the public sale of those
warrants.
Common Stock
Shares issuable on exchange of notes
In connection with our acquisition of BCcomponents, we entered into a put
and call agreement with the holders of our floating rate unsecured notes due
2102. Among other things, this agreement provides that holders of the notes may
"put" or exchange the notes for our common stock, at a ratio of one share of our
common stock, for each $17.00 principal amount of the notes. A total of
6,176,467 shares of our common stock are issuable upon exchange of the
$105,000,000 principal amount of notes outstanding, subject to anti-dilution and
transactional adjustments. These shares are being offered through this
prospectus for sale by the selling securityholders following exchange of the
notes in the manner described under "Plan of Distribution."
Shares issuable on exercise of warrants
We are offering through this prospectus the 7,000,000 shares of our common
stock issuable upon exercise of the class A warrants and the 1,823,529 shares of
our common stock issuable upon exercise of the class B warrants to the holders
of the warrants upon exercise. As a result, the shares issuable upon exercise of
the warrants will be freely tradeable under the United States securities laws,
other than by holders who are our affiliates.
In addition, the selling securityholders may offer the shares issuable
upon exercise of the warrants for resale through this prospectus, but only if
they are the initial holders of the warrants or affiliates of the initial
holders or if the shares are being offered for resale in an underwritten public
offering where the warrants are being exercised in connection with the offering.
Other holders of the warrants may only sell the common stock underlying
the warrants pursuant to the prospectus:
o in an underwritten public offering, where the warrants are being
exercised in connection with the offering; or
o if for any reason our registration of the shares of common stock
issuable upon exercise of the warrants is not effective.
2
FORWARD LOOKING INFORMATION
Some of the statements in this prospectus and in documents incorporated by
reference constitute forward-looking statements. These forward-looking
statements reflect our current views with respect to future events or our
financial performance, and involve certain known and unknown risks,
uncertainties and other factors, including those identified below, which may
cause our or our industry's actual or future results, levels of activity,
performance or achievements to differ materially from those expressed or implied
by any forward-looking statements or from historical results. In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"could," "would," "should," "believe," "expect," "plan," "anticipate," "intend,"
"estimate," "predict," "potential" and other expressions which indicate future
events and trends. We 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.
The following factors, among others, could cause our or our industry's
future results to differ materially from historical results or those
anticipated:
o overall economic and business conditions;
o competitive factors in the industries in which we conduct our
business;
o changes in governmental regulation;
o the demand for our goods and services;
o the fact that Vishay's customers may cancel orders they have placed
with us, in whole or in part, without advance notice;
o changes in tax requirements, including tax rate changes, new tax
laws and revised tax law interpretations;
o changes in generally accepted accounting principles or
interpretation of those principles by governmental agencies and
self-regulatory groups;
o developments in and results of litigation;
o interest rate fluctuations, foreign currency rate fluctuations and
other capital market conditions;
o economic and political conditions in international markets,
including governmental changes and restrictions on the ability to
transfer capital across borders; o changes in the cost of raw
materials used in our business;
o the timing, impact and other uncertainties of acquisitions that we
may consider or consummate; and
o the ability to achieve anticipated synergies and other cost savings
in connection with such acquisitions.
These factors and the risk factors described below are all of the
important factors of which we are aware that could cause actual results,
performance or achievements to differ materially from those expressed in any of
our forward-looking statements. We operate in a continually changing business
environment, and new risk factors emerge from time to time. Other unknown or
unpredictable factors also could have material adverse effects on our future
results, performance or achievements. We cannot assure you that projected
results or events will be achieved or will occur.
3
RISK FACTORS
An investment in the securities offered through this prospectus involves
certain risks. You should carefully consider the following risks, as well as
other information contained elsewhere in this prospectus or incorporated by
reference in this prospectus.
Risk factors relating to our business generally
Our business is cyclical and the current decline in demand in the electronic
component industry may continue and may become more pronounced.
We and others in the electronic and semiconductor component industry have
experienced in the past two years a decline in product demand on a global basis,
resulting in order cancellations and deferrals, lower average selling prices,
and a material and adverse impact on our results of operations. This decline has
been primarily attributable to a slowing of growth in the personal computer and
cellular telephone product markets. If the decrease in the demand for our
products continues or becomes more pronounced, or overall supply increases
because we or our competitors expand production capacity, our average sales
prices could decline further, causing a reduction in our gross margins and
operating profits. In addition, the combination of a decline in demand, together
with recessionary trends in the global economy makes it difficult for us to
predict our future sales, which also makes it more difficult to manage our
operations.
We have incurred and may continue to incur restructuring costs.
To remain competitive, particularly when business conditions are
difficult, we attempt to reduce our cost structure through restructuring
activities. This includes both acquisition-related restructuring, where we
attempt to streamline the operations of companies we acquire and achieve
synergies between our acquisitions and our existing business, and restructuring
our existing businesses, where we seek to eliminate redundant facilities and
staff positions and move operations, where possible, to jurisdictions with lower
labor costs. In 2002, we recorded restructuring costs of approximately $48
million related to acquisitions and $31 million related to our existing
businesses. We have incurred $12.9 million of additional restructuring expenses
in the first six months of 2003 and expect to continue to incur such expenses
for the remainder of 2003.
In the past we have grown through acquisitions but this may not continue.
Our long-term historical growth in revenues and net earnings has resulted
in large part from our strategy of expansion through acquisitions. We cannot
assure you, however, that we will identify or successfully complete transactions
with suitable acquisition candidates in the future. We also cannot assure you
that acquisitions that we complete in the future will be successful. If an
acquired business fails to operate as anticipated or cannot be successfully
integrated with our other businesses, our results of operations, enterprise
value, market value and prospects could all be materially and adversely
affected.
Our debt levels have recently increased, which could adversely affect the
perception in the financial markets of our financial condition.
Our outstanding debt increased from approximately $141 million at the end
of 2000 to approximately $692 million at June 30, 2003. This increase was the
result of our acquisition activity, particularly the acquisition of General
Semiconductor, Inc. in November 2001, in which we assumed approximately $170
million in convertible notes issued by General Semiconductor and $85 million in
bank debt, and the acquisition of BCcomponents in December 2002, in which we
issued or assumed indebtedness of approximately $275 million. The increase in
indebtedness from acquisitions was offset somewhat by the repayment of
outstanding debt with cash from operations. The marketplace could react
negatively to our current debt levels which in turn could affect our share price
and also make it more difficult for us to obtain financing in the future. Our
higher debt level was one of the factors cited by Moody's Investor Services,
Inc. when it announced in April 2003 that it had lowered our debt ratings. On
July 31, 2003, Moody's announced that it had upwardly revised its ratings of our
debt based on its belief that the restructuring of our credit facility and the
issuance of our convertible subordinated notes dues 2023 alleviates short term
liquidity concerns, but this view could change.
4
In June 2004, holders of our Liquid Yield Option(TM) Notes (LYONs) will
have the right to "put" these notes to us at an aggregate price of approximately
$235 million, giving effect to our repurchase of a portion of the LYONs with the
proceeds of the offering of our convertible subordinated notes due 2023. We
believe that, if necessary, we will have adequate cash resources to finance the
purchase of any LYONs that are put to us. Also, we may elect to pay all or part
of the purchase price for the LYONs that are put to us in shares of our common
stock. Nevertheless, our obligation to purchase the LYONs in June 2004 could be
a cause of concern in the financial markets and was another factor cited by
Moody's when it downgraded our debt.
To remain successful, we must continue to innovate.
Our future operating results are dependent on our 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 we will be unable to anticipate the direction
of technological change or that we will be unable to develop and market new
products and applications in a timely fashion to satisfy customer demands. If
this occurs, we could lose customers and experience adverse effects on our
financial condition and results of operations.
Future acquisitions could require us to issue additional indebtedness or equity.
If we 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 acquisition financing would likely
decrease our ratio of earnings to fixed charges and adversely affect other
leverage criteria. Under our existing credit facility, we are required to obtain
the lenders' consent for certain additional debt financing and to comply with
other covenants including the application of specific financial ratios. We are
also restricted from paying cash dividends on our capital stock. We cannot
assure you that the necessary acquisition financing would be available to us on
acceptable terms when required. If we were to undertake an acquisition for
equity, the acquisition may have a dilutive effect on the interests of the
holders of our common stock.
Our results are sensitive to raw material availability, quality and cost.
General
Many of our products require the use of raw materials that are produced in
only a limited number of regions around the world or are available from only a
limited number of suppliers. Our results of operations may be materially and
adversely affected if we have difficulty obtaining these raw materials, the
quality of available raw materials deteriorates or there are significant price
increases for these raw materials. For example, the prices for tantalum and
palladium, two raw materials that 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 which would
result in decreased margins for the products in which they are used. For periods
in which the prices are declining, we may be required to write down our
inventory carrying cost of these raw materials, since we record our inventory at
the lower of cost or market. Depending on the extent of the difference between
market price and our carrying cost, this write-down could have a material
adverse effect on our net earnings. As discussed below, we have recorded
substantial write-downs of tantalum and palladium in the current economic
downturn.
From time to time there have been short-term market shortages of raw
materials. While these shortages have not historically adversely affected our
ability to increase production of products containing tantalum and palladium,
they have historically resulted in higher raw material costs for us. We cannot
assure you that any of these market shortages in the future would not adversely
affect our ability to increase production, particularly during periods of
growing demand for our products.
5
Tantalum
We are a major consumer of the world's annual production of tantalum.
Tantalum, a metal purchased in powder or wire form, is the principal material
used in the manufacture of tantalum capacitors. There are currently three major
suppliers that process tantalum ore into capacitor grade tantalum powder. Due to
the strong demand for our tantalum capacitors and difficulty in obtaining
sufficient quantities of tantalum powder from our suppliers, we stockpiled
tantalum ore in 2000 and early 2001. During 2001, we experienced a significant
decrease in sales due to declining orders and the deferral or cancellation of
existing orders. Our tantalum capacitor business was particularly impacted by
the slowdown in sales. Prices for tantalum ore and powder decreased during this
period. As a result, we recorded write-downs of $52,000,000 on tantalum during
2001.
In June 2002, we agreed with Cabot Corporation to amend our two tantalum
supply agreements for the supply by Cabot to us of tantalum powder and wire.
Pursuant to the amendments, we and Cabot agreed to reduce volumes, and starting
in 2003, prices of tantalum products under the agreements and to extend the term
of one of the agreements by one year. We also agreed to purchase tantalum
products at regular intervals over the term of the agreements. These amendments
require us to purchase tantalum products in excess of our current usage
requirements.
In the fourth quarter of 2002 we took charges of approximately $106
million against our contractual commitments to purchase tantalum powder and wire
from Cabot through 2006 and wrote-off approximately $25.7 million of our
existing inventory of tantalum ore, powder and wire. We did this because the
current market prices of tantalum are substantially below the prices at which we
are committed to purchase tantalum under our long-term contracts with Cabot and
the prices at which we were carrying our tantalum raw materials inventory. If
market prices for tantalum were to decline further, we could be required to
record additional write-downs on our tantalum purchase commitments and
inventory.
Palladium
Palladium, a metal used to produce multi-layered ceramic capacitors, is
currently found primarily in South Africa and Russia. Palladium is a commodity
product subject to price volatility. The price of palladium has fluctuated in
the range of approximately $179 to $1,090 per troy ounce during the last three
years. As of June 30, 2003, the price of palladium was approximately $179 per
troy ounce. During 2001 and 2002, we recorded write-downs on our palladium
inventories of $18 million and $1.7 million respectively. In the first six
months of 2003, we recorded a write-down on our palladium inventories of $1.5
million.
Our backlog is subject to customer cancellation.
As of June 30, 2003, our backlog was $420 million. Many of the orders that
comprise our backlog may be canceled by our customers without penalty. Our
customers may on occasion double and triple order components from multiple
sources to ensure timely delivery when backlog is particularly long. They often
cancel orders when business is weak and inventories are excessive, a phenomenon
that we have experienced in the current economic slowdown. Therefore, we cannot
be certain the amount of our backlog does not exceed the level of orders that
will ultimately be delivered. Our results of operations could be adversely
impacted if customers cancel a material portion of orders in our backlog.
We face intense competition in our business, and we market our products to an
increasingly concentrated group of customers.
Our business is highly competitive worldwide, with low transportation
costs and few import barriers. We compete principally on the basis of product
quality and reliability, availability, customer service, technological
innovation, timely delivery and price. The electronics components industry has
become increasingly concentrated and globalized in recent years and our major
competitors, some of which are larger than us, have significant financial
resources and technological capabilities.
6
Our customers have become increasingly concentrated in recent years, and
as a result, their buying power has increased and they have had greater ability
to negotiate favorable pricing. This trend has adversely affected our average
selling prices, particularly for commodity components.
We may not have adequate facilities to satisfy future increases in demand for
our products.
Our business is cyclical and in periods of a rising economy, we may
experience intense demand for our products. During such periods, we may have
difficulty expanding our manufacturing to satisfy demand. Factors which could
limit such expansion include delays in procurement of manufacturing equipment,
shortages of skilled personnel and capacity constraints at our facilities. If we
are unable to meet our customers' requirements and our competitors sufficiently
expand production, we could lose customers and/or market share. This loss could
have an adverse effect on our financial condition and results of operations.
Future changes in our environmental liability and compliance obligations may
harm our ability to operate or increase costs.
Our manufacturing operations, products and/or product packaging are
subject to environmental laws and regulations governing air emissions,
wastewater discharges, the handling, disposal and remediation of hazardous
substances, wastes and certain chemicals used or generated in our manufacturing
processes, employee health and safety labeling or other notifications with
respect to the content or other aspects of our processes, products or packaging,
restrictions on the use of certain materials in or on design aspects of our
products or product packaging and responsibility for disposal of products or
product packaging. We establish reserves for specifically identified potential
environmental liabilities which we believe are adequate. Nevertheless, we often
unavoidably inherit certain pre-existing environmental liabilities, generally
based on successor liability doctrines. Although we have never been involved in
any environmental matter that has had a material adverse impact on our overall
operations, there can be no assurance that in connection with any past or future
acquisition we will not be obligated to address environmental matters that could
have a material adverse impact on our operations. In addition, more stringent
environmental regulations may be enacted in the future, and we cannot presently
determine the modifications, if any, in our operations that any such future
regulations might require, or the cost of compliance with these regulations. In
order to resolve liabilities at various sites, we have entered into various
administrative orders and consent decrees, some of which may be, under certain
conditions, reopened or subject to renegotiation.
Our products may experience a reduction in product classification levels under
various military specifications.
We have qualified certain of our products under various military
specifications, approved and monitored by the United States Defense Electronic
Supply Center, and under certain European military specifications. These
products are assigned certain classification levels. In order to maintain the
classification level of a product, we must continuously perform tests on the
product and the results of these tests must be reported to governmental
agencies. If any of our products fails to meet the requirements of the
applicable classification level, that product's classification may be reduced to
a lower level. A decrease in the classification level for any of our products
with a military application could have an adverse impact on the net sales and
earnings attributable to that product.
Risk factors relating to our operations outside the United States
We obtain substantial benefits by operating in Israel, but these benefits may
not continue.
We have increased our operations in Israel over the past several years.
The low tax rates in Israel applicable to earnings of our operations in that
country, compared to the rates in the United States, have had the effect of
increasing our net earnings, although this was not the case in 2002. Also, we
have benefited from employment incentive grants made by the Israeli government.
Recently, the Israeli government suspended payment on one of these grants after
we were forced to lay off a significant number of employees as a result of the
current economic downturn. Although we reached agreement with the Israeli
government to resume payment on this grant, there can be no assurance that we
will maintain our eligibility for this or other existing project grants. There
can also be no assurance that in the future the Israeli government will continue
to offer new grant and tax incentive programs applicable to us or that, if it
does, such programs will provide the same level of benefits we have historically
7
received or that we will continue to be eligible to take advantage of them. Any
significant increase in the Israeli tax rates or reduction or elimination of the
Israeli grant programs that have benefited us could have an adverse impact on
our results of operations.
We attempt 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.
Our 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, Malaysia, the Republic of China (Taiwan) and the People's
Republic of China. In this process, we 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
under-utilization may result initially in production inefficiencies and higher
costs. These costs include those associated with compensation in connection with
work force reductions and plant closings in the higher labor cost regions, and
start-up expenses, manufacturing and construction delays, and increased
depreciation costs in connection with the initiation or expansion of production
in lower labor cost regions.
As we implement transfers of certain of our operations, we may experience
strikes or other types of labor unrest as a result of lay-offs or termination of
our employees in high labor cost countries.
We are subject to the risks of political, economic and military instability in
countries outside the United States in which we operate.
We have operations outside the United States, and approximately 69% of our
revenues during 2002 were derived from sales to customers outside the United
States. Some of the countries in which we operate have in the past experienced
and may continue to experience political, economic and military instability or
unrest. These conditions could have an adverse impact on our ability to operate
in these regions and, depending on the extent and severity of these conditions,
could materially and adversely affect our overall financial condition and
operating results. In particular, current tensions in the Middle East could
adversely affect our business operations in Israel and elsewhere.
Our business may have been affected by the recent outbreak of SARS and the
effects of that outbreak may linger.
The recent outbreak of severe acute respiratory syndrome, or SARS, that
began in the People's Republic of China adversely affected our business during
the first six months of 2003, particularly in Asia where we derived
approximately 38% of our revenue in 2002. This impact included disruptions in
the operations of our customers, a slowdown in customer orders and reduced sales
in certain end markets. We cannot predict if the adverse effects of the SARS
outbreak will continue and, if so, the time period during which these effects
will continue to be felt.
Risk factors relating to our capital structure
The holders of our Class B common stock have effective voting control of Vishay.
We have two classes of common equity: common stock and Class B common
stock. The holders of our common stock are entitled to one vote for each share
held, while the holders of our Class B common stock are entitled to 10 votes for
each share held. Currently, the principal holder of our Class B common stock,
our chairman and chief executive officer, controls approximately 49.0% of our
outstanding voting power. As a result, this holder of Class B common stock can
effectively cause the election of directors and approve other actions as a
stockholder by obtaining votes from a relatively small number of other
stockholders of Vishay. For example, at our most recent annual meeting of
stockholders, a proposal to stagger our company's board of directors was
approved despite a vote against this proposal by a majority of voting
stockholders other than holders of the Class B common stock.
8
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 that holders of our Class B common stock have over
our company may make us less attractive as a target for a takeover proposal. It
may also make it more difficult or discourage a merger proposal or proxy contest
for the removal of the incumbent directors, even if such actions were favored by
a substantial majority of our stockholders other than the holders of our Class B
common stock. Accordingly, this may deprive the holders of our 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.
We have a staggered board of directors which could make a takeover of Vishay
difficult.
At our most recent annual meeting of stockholders, our stockholders
approved a proposal to stagger our board of directors. A staggered board of
directors might discourage, delay or prevent a change in control of us by a
third party and could discourage proxy contests and make it more difficult for
our stockholders to elect directors and take other corporate actions. Also, as a
consequence of our staggered board, directors may not be removed without cause,
even though a majority of stockholders may wish to do so.
Risk factors relating to the offering
There may be no active trading market for the warrants.
Before the offering, there has been no established trading market for our
class A warrants or our class B warrants. We do not intend to list the warrants
on a national securities exchange or seek admission of the warrants for
quotation through any automated quotation system. Moreover, we cannot assure you
as to the development or liquidity of any market for the warrants, the ability
of the warrant holders to sell their warrants or any portion of those warrants
or the price at which holders would be able to sell their warrants or any
portion of those warrants.
Exchange of the notes or exercise of the warrants will dilute the ownership
interests of existing stockholders.
The exchange of some or all of the notes or the exercise of some or all of
the warrants will dilute the ownership interests of existing stockholders and
any sales in the public market of the shares of our common stock issuable upon
such exchange or exercise could adversely affect prevailing market prices of our
common stock. In addition, the existence of the warrants may encourage short
selling by market participants because exercise of the warrants could depress
the price of our common stock.
USE OF PROCEEDS
We will not receive any cash proceeds from the sale of warrants or our
common stock by the selling securityholders.
If the class A warrants are exercised in full, we would realize proceeds,
before expenses, in the amount of $140,000,000. If the class B warrants are
exercised in full, we would realize proceeds, before expenses, in the amount of
$55,252,928. If we spin off a subsidiary or business unit, any warrants then
outstanding, under certain circumstances, would be exchanged in part for
warrants of the spin-off entity. In that case, the amount of proceeds that we
would realize upon exercise of the warrants would be lower.
The net proceeds of the exercise of the warrants will be used to pay down
any outstanding debt on our revolving credit facility and for general corporate
purposes.
9
DESCRIPTION OF CAPITAL STOCK
The aggregate number of shares of capital stock which Vishay has authority
to issue is 341,000,000 shares: 1,000,000 shares of preferred stock, par value
$1.00 per share, 300,000,000 shares of common stock, par value $0.10 per share,
and 40,000,000 shares of Class B common stock, par value $0.10 per share. No
shares of preferred stock have been issued. At July 29, 2003, there were
144,262,508 shares of common stock and 15,383,296 shares of Class B common stock
outstanding.
Common Stock
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 in, all dividends and other distributions declared by the board
of directors of Vishay. In the event of a stock dividend or stock split, holders
of common stock will receive shares of common stock and holders of Class B
common stock will receive shares of Class B common stock. Neither the common
stock nor the Class B common stock may be split, divided or combined unless the
other is split, divided or combined equally.
The holders of common stock are entitled to one vote for each share held.
Holders of Class B common stock are entitled to 10 votes for each share held.
The common stock and the Class B common stock vote together as one class on all
matters subject to stockholder approval, except as set forth in the following
sentence. The approval of the holders of common stock and of Class B common
stock, each voting separately as a class, is required to authorize issuances of
additional shares of Class B common stock other than in connection with stock
splits and stock dividends.
Shares of Class B common stock are convertible into shares of our common
stock on a one-for-one basis at any time at the option of the holder thereof.
The Class B common stock is not transferable except to the holder's spouse,
certain of such holder's relatives, certain trusts established for the benefit
of the holder, the holder's spouse or relatives, corporations and partnerships
beneficially owned and controlled by such holder, such holder's spouse or
relatives, charitable organizations and such holder's estate. Upon any transfer
made in violation of those restrictions, shares of Class B common stock will be
automatically converted into shares of our 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.
Our common stock is listed on the New York Stock Exchange. There is no
public market for shares of our Class B common stock. All outstanding shares of
common stock and Class B common stock are, and upon exchange of the notes or
exercise of the warrants, the shares of common stock issuable upon exchange of
the notes and exercise of the warrants will be, validly issued, fully paid and
non-assessable.
Preferred Stock
Our board of directors is authorized, without further stockholder
approval, to issue from time to time up to an aggregate of 1,000,000 shares of
preferred stock in one or more series. The board of directors may fix or alter
the designation, preferences, rights and any qualification, limitations, or
restrictions of the shares of any series, including the dividend rights,
dividend rates, conversion rights, voting rights, redemption terms and prices,
liquidation preferences and the number of shares constituting any series. No
shares of our preferred stock are currently outstanding.
Other Matters
We have a staggered board of directors, with one third of the board being
elected each year. As a consequence, directors may not be removed other than for
cause.
10
We are subject to Section 203 of the Delaware General Corporation Law
which prohibits us from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. Generally, an "interested
stockholder" is a person who, together with affiliates and associates, owns or
within three years did own, 15% or more of our voting stock.
We furnish to our stockholders annual reports containing financial
statements certified by an independent public accounting firm.
American Stock Transfer & Trust Company is the transfer agent and
registrar of our common stock and Class B common stock.
Common Stock Offered Pursuant to this Prospectus
The common stock covered by this prospectus includes common stock issuable
upon exercise of the warrants and upon exchange of the notes. For a description
of the warrants, see "Description of the Warrants."
We issued the notes and entered into a related put and call agreement in
connection with the acquisition of BCcomponents to the holders of $105 million
principal amount of mezzanine debt of BCcomponents in exchange for the mezzanine
debt and certain other securities of BCcomponents. The notes were issued
pursuant to the terms of a note purchase agreement and the notes, copies of
which are filed as exhibits to the registration statement of which this
prospectus forms a part and to which reference is made for a definitive
description of the terms of the notes.
The notes bear interest at LIBOR plus 1.5% for any interest period ending
on or prior to December 31, 2006, and LIBOR thereafter. If at any time beginning
on the date of issue of the notes and ending on December 31, 2010 our common
stock trades at a price above $45.00 per share over a specified measuring
period, the interest rate will be reduced for all interest periods beginning on
or after January 1, 2011 to one-half LIBOR. Interest on the notes is payable
quarterly in arrears on March 31, June 30, September 30 and December 31 in each
year beginning on December 31, 2002.
The notes are subject to a put and call agreement executed by us for the
benefit of the holders of the notes. A copy of the put and call agreement is
filed as an exhibit to the registration agreement of which this prospectus forms
a part. Under the agreement, note holders may "put" the notes to us at an
exchange price of one share of our common stock for $17.00 principal amount of
the notes, or 6,176,467 shares of our common stock in the aggregate. We may
similarly call the notes in exchange for shares of our common stock at the same
exchange price at any time beginning on January 2, 2018 and ending on the date
that is 30 days prior to the maturity date of the notes. If the price of our
common stock has not traded above $35.00 per share over a specified measuring
period prior to the call, the number of shares issuable in the call will be the
principal amount of the notes divided by the then current market price for the
shares, or we may call the notes for cash equal to the principal amount of the
notes. Common stock issued in exchange for notes on exercise of the put or the
call will be in satisfaction of our obligation to pay the principal of the notes
and all interest accrued but unpaid to the date of exchange.
Unless the notes are otherwise previously redeemed, repaid or repurchased,
upon maturity at December 31, 2102, we will pay the principal of the notes plus
accrued and unpaid interest up to the maturity date.
The exchange price, and in some cases the cash that we or a successor may
be required to pay, under the put and the call are subject to anti-dilution and
transactional adjustments under the terms of the put and call agreement, to
which reference is made for a description of these adjustments. In the event of
a spin-off transaction of the type described below under "Description of the
Warrants--Adjustments--Spin-offs," other notes of Vishay, having the same terms
and provisions but a lesser principal amount, may be substituted for the notes.
This prospectus covers the shares of our common stock issuable upon exchange of
the replacement notes as well.
11
DESCRIPTION OF THE WARRANTS
On December 13, 2002, we acquired all of the outstanding shares of
BCcomponents in exchange for class A warrants to acquire 7,000,000 shares of our
common stock at an exercise price of $20.00 per share and class B warrants to
acquire 1,823,529 shares of our common stock at an exercise price of $30.30 per
share. With the exception of the exercise price, the class A warrants and the
class B warrants have identical terms and provisions. Unless otherwise
indicated, we will use the term warrants to refer to the class A warrants and
the class B warrants. The following summary description of the warrants sets
forth some general terms and provisions of the warrants, but the summary does
not purport to be complete and is qualified in all respects by reference to the
actual text of the warrants and the warrant agreement, pursuant to which the
warrants were issued, copies of which have been filed as an exhibit to the
registration statement of which this prospectus is a part. We urge you to read
the text of the warrant agreement and the warrants because those documents, and
not this description, define your complete rights as a warrant holder.
Exercise Period
The warrants may be exercised at any time from and after the date the
warrants were issued until the expiration date by any holder other than an
initial holder of the warrants or an affiliate of an initial holder. The
warrants may be exercised at any time from and after December 13, 2003, the
first anniversary of the date the warrants were issued, until the expiration
date by an initial holder of the warrants or an affiliate of an initial holder.
The warrants expire on December 13, 2012, ten years from the date of issuance.
Exercise Price and Other Terms
Each class A warrant will entitle its holder to purchase the shares of our
common stock specified on the face of the class A warrant at an exercise price
of $20.00 per share, and each class B warrant will entitle its holder to
purchase the shares of our common stock specified on the face of the class B
warrant at an exercise price of $30.30 per share. The exercise price of the
warrants is subject to adjustment in accordance with the anti-dilution and
transactional adjustment provisions described below. Each warrant holder will be
able to exercise the warrants, in whole or in part, by delivering to us the
certificate representing the warrants, the exercise notice properly completed
and executed and payment of the aggregate exercise price for the number of
shares of our common stock as to which the warrant is being exercised. The
exercise price will be payable in cash or by check payable to the order of
Vishay Intertechnology, Inc., except upon exercise of the warrants in an
underwritten public offering or in a block trade.
We will not issue any fractional shares of our common stock upon the
exercise of the warrants. We will pay a cash adjustment instead of fractional
shares equal to the product resulting from multiplying the fractional amount by
the daily market value of one share of our common stock on the trading day prior
to the date the warrant is exercised.
Upon exercise of any warrant, we will deliver a stock certificate
representing the number of shares that were exercised under the warrant. If the
warrant is not fully exercised, we will execute a new warrant certificate
exercisable for the remaining shares and deliver the new warrant certificate at
the same time as the stock certificate for the exercised shares.
Adjustments
The exercise price of the warrants and the number of shares of our common
stock purchasable upon the exercise of the warrants may be subject to adjustment
in certain situations.
In the description of the adjustments that follows, we use the following
terms and concepts:
The Black-Scholes value of the warrants is to be determined on the basis
of the Black-Scholes methodology by an investment banking firm of national
reputation and standing, selected by us and reasonably acceptable to a majority
of the warrant holders, but the Black-Scholes Value of a warrant cannot exceed
the daily market price of our common stock on the day immediately preceding the
transaction in question. For purposes of applying the Black-Scholes methodology,
the price per share of our common stock is deemed to be the average of the daily
12
market prices for the ten full trading days ending ten trading days prior to the
first public announcement of the relevant transaction, and the methodology is to
be applied as if the relevant transaction had not occurred.
Daily market price. Daily market price means, for any trading day, the
volume-weighted average of the per share selling prices on that trading day of
our common stock or other relevant security on the principal market on which the
relevant security is then quoted. If there are no sales of the security on the
trading day, daily market price means the average of the high bid and low ask
price for the relevant security on the last trading day on which a sale was
reported. If the security is not traded so that there are no bid and ask prices,
the daily market price will be the per share fair market value of the relevant
security as determined by an investment banking firm of national reputation and
standing that we select and that is reasonably acceptable to a majority of the
warrant holders.
Majority of the warrant holders means, at any time, the holders of
warrants that are exercisable for more than 50% of the shares for which all
outstanding warrants are exercisable at that time. Whenever reasonable approval
of a majority of the warrant holders is required for any action or
determination, that approval is deemed to be given if a majority of the warrant
holders do not reasonably object to the action or determination by written
notice to us within ten business days of the date on which notice of the action
or determination is first given to the holders.
Declaration of Stock Dividend, Splits, Reverse Splits or Reclassification
or Reorganization; Other Distributions. We will make the following adjustments
if we declare a stock dividend, split, reverse split, if there is a
reclassification or reorganization of our common stock or if we make
distributions on our common stock. In each case, we will issue a notice to each
warrant holder at least ten business days before the record date of the
adjustment. Any adjustment will become effective immediately after the effective
date of the adjustment retroactive to the record date, if any.
o If we declare any dividend or other distribution upon, or subdivide,
the outstanding shares of our common stock into a greater number of
shares, then the exercise price per share of the warrants will be
decreased proportionately, and the number of shares of our common
stock issuable upon exercise of the warrant will be increased
proportionately.
o If we combine the outstanding shares of our common stock into a
smaller number of shares, then the exercise price per share of the
warrants will be increased proportionately, and the number of shares
of our common stock issuable upon exercise of the warrants will be
decreased proportionately.
o If we issue to holders of our shares of common stock any
indebtedness, shares of our stock or any other securities by
reclassification of our common stock; distribute to holders of our
shares of common stock any rights, options or warrants to purchase
or subscribe for any evidence of indebtedness, shares of our stock
(other than distributions in connection with adjustments for
issuances of any rights, options or warrants, or spin-offs) or any
other securities; distribute to holders of our shares of common
stock cash (other than regular quarterly or semi-annual cash
dividends) or other property; or issue by means of a capital
reorganization our other securities in lieu of our common stock or
in addition to our common stock, then the warrants will be adjusted
so that each warrant will be exercisable into the kind and number of
our shares or other securities or securities of any successor
entity, or cash or other property that the warrant holder would have
owned or have been entitled to receive had the warrant holder
exercised the warrants immediately prior to any of these events.
Rights Issuance. We will make the following adjustments if we distribute
any rights, options or warrants to holders of our common stock:
o If we distribute any rights, options or warrants to holders of our
common stock entitling them, for a period of 60 days or less after
the record date for determination of the stockholders entitled to
receive these rights, to purchase or subscribe for shares of our
common stock at a price per share less than 90% of the daily market
price of our common stock on the record date, then we will increase
the number of shares issuable upon exercise of the warrants in the
proportion that
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o the maximum number of shares issuable upon exercise of the warrants
plus the number of outstanding shares, bears to
o the maximum number of shares that would have been issuable upon
exercise price of the warrants had their exercise price been the
average market price for Vishay common stock over a specified
trading period plus the number of outstanding shares.
o The adjustment will be made in accordance with the following
formula:
N = No x (O + A)/ (O +C/M))
where:
N = the adjusted number of shares issuable upon exercise of a
warrant;
No = the number of shares issuable upon exercise of a warrant prior
to the adjustment;
O = the number of shares outstanding immediately prior to the
issuance of the rights, options or warrants;
A = the maximum number of shares issuable pursuant to the rights,
options or warrants;
C = the aggregate consideration that we will receive for the
issuance of our common stock upon exercise of the rights, options
or warrants; and
M = the average of the daily market prices of our common stock for
the ten consecutive trading days immediately preceding the record
date.
The exercise price of the warrants will be correspondingly reduced. If less than
all of the rights, options or warrants have been exercised upon the expiration
of such rights, options or warrants, the number of shares issuable upon exercise
of the warrants and corresponding adjustment to the exercise price of the
warrants will be readjusted based on the number of rights, options or warrants
actually exercised.
o If we distribute any rights, options or warrants to holders of our
common stock entitling them, for a period of more than 60 days after
the record date, to purchase or subscribe for shares of our common
stock at a price per share less than 90% of the daily market price
of our common stock on the record date, then we will distribute the
same rights, options or warrants to the warrant holders on the
record date as if the warrant holders had exercised their warrants
immediately prior to the record date.
Liquidation or Dissolution. If we liquidate, dissolve or wind up our
affairs, other than in connection with a consolidation, merger or sale or
conveyance of all or substantially all of our assets or a spin-off transaction,
then the warrants will terminate and expire at the close of business on the last
full business day before the earliest record date fixed for the payment of any
distributable amount on our common stock. At least ten business days prior to
the record date, we will provide each warrant holder with notice of the
liquidation, dissolution or winding up of affairs. Upon exercise of the
warrants, each warrant holder will receive consideration in the liquidation on
the same basis as holders of our common stock or other securities of any other
class for which the warrants are then exercisable.
Merger or Consolidation. If any person or entity acquires us in a
transaction in which we are merged with or into or consolidated with another
person or entity, or if we sell or convey all or substantially all of our assets
to another person or entity, then we will make the adjustments described below.
In each case, we will give written notice to each warrant holder of any change
at least ten business days prior to the effective date of the change. These
provisions do not apply to a transaction in which we are the surviving entity
and have reporting obligations under the Securities Exchange Act because of the
registration of our equity securities.
o The warrant holder will receive, at the holder's election, either:
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o upon exercise of the warrants, including the payment of the exercise
price therefor, the kind and number of shares, securities, cash,
assets or other property which the holder would otherwise have been
entitled to receive in the transaction had the holder exercised the
warrants before the transaction, or
o the Black-Scholes value of the warrants in cash, or in certain
circumstances, in securities of the purchaser. This cash-out option
may not be available in certain circumstances if it would interfere
with the tax or accounting treatment of the transaction.
If the acquirer is a reporting company under the Securities Exchange Act,
and the acquirer is offering a combination of cash and shares, then the warrant
holder may elect to receive a combination of:
o a warrant exercisable for securities of the acquirer in an amount
and at an exercise price described below, but otherwise having the
same terms as the Vishay warrants, and
o a cash amount calculated as described below.
o The exercise price for the acquirer warrants will be the exercise
price for the Vishay warrants multiplied by the ratio of the market
value of a share of our common stock averaged over a specified
trading period to the market price of share of acquirer stock
averaged over the same period. The formula for determining the
exercise price of the acquirer warrants is as follows:
Ew = (Eo x (Pa/Pt))
where:
Ew = the per share exercise price of the acquirer warrants;
Eo = the per share exercise price of the Vishay warrants;
Pt = the average of the daily market prices of our common stock for the
ten consecutive trading days immediately preceding the effective
date of the transaction; and
Pa = the average daily market price of the acquirer shares for the ten
consecutive trading days immediately preceding the effective date
of the transaction.
o The number of acquirer shares issuable upon exercise of an acquirer
warrant will be the number of shares exercisable upon exercise of
the Vishay warrant multiplied by the number of acquirer shares
delivered for each Vishay share in the transaction. The formula for
determining this number is as follows:
N = a x No where:
N = the number of shares issuable upon exercise of the acquirer
warrant;
a = the number of acquirer shares delivered in the transaction to
holders of our common stock for each share of our common stock;
and
No = the number of shares issuable upon exercise of the original
Vishay warrant;
The amount of cash (or in certain circumstances the value of securities of
the acquirer) will be determined by multiplying the Black-Scholes value of the
Vishay warrant by the fraction of the total value of the consideration payable
to Vishay stockholders in the transaction attributable to the cash that they
receive. The formula for this determination is as follows:
AC = BSw x (1-((a x Pa) /C ))
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where the symbols defined above have the same meanings here and:
AC = the cash amount;
BSw = the Black-Scholes value of the Vishay warrant; and
C = the total fair market value of the consideration delivered in the
transaction to holders of our common stock for each share of our
common stock. For purposes of determining this amount:
o the fair market value of the component of the
consideration consisting of shares of the acquirer is
deemed to be the average daily market price of the
acquirer shares for the ten consecutive trading days
immediately preceding the effective date of the
transaction multiplied by the number of acquirer shares
delivered in the transaction for each share of our
common stock;
o the fair market value of any cash component is the
amount of the cash delivered in the transaction for each
share of our common stock; and
o the fair market value of any other consideration
delivered in the transaction for each share of our
common stock will be as determined by an investment
banking firm of national reputation and standing
selected by us and reasonably acceptable to a majority
of the warrant holders.
This cash-out election may not be available in certain circumstances if it would
interfere with the tax or accounting treatment of the transaction. Under these
circumstances, a warrant holder may elect to receive shares of the acquirer
having a fair market value (determined as described above) equal to the cash
amount; provided this would not interfere with the tax or accounting treatment
of the transaction.
We will give the warrant holders notice of any transaction to which this
discussion relates at least ten business days prior to the effective date of the
transaction and earlier in certain circumstances.
Spin-offs. We refer to a distribution to all holders of our common stock
consisting of the capital stock of one of our subsidiaries or other business
units as a spin-off. If a spin-off were to occur, each holder of a warrant on
the date of the spin-off distribution will be entitled to receive a warrant to
purchase the number of shares of capital stock of the spin-off company that the
holder would have received had the holder exercised the warrants immediately
prior to the record date for the spin-off. The terms of the spin-off warrants
will be the same as the Vishay warrants, except that the exercise price of the
spin-off warrant will be determined by multiplying the exercise price of the
Vishay warrant by the ratio of the market value of a spin-off share, averaged
over a specified period following the spin-off, to the combined value of Vishay
shares and spin-off shares, averaged over the same period, that Vishay
stockholders will hold following the spin-off for each share of Vishay stock
that they held prior to the spin-off. The formula for this determination is as
follows:
Es = Eo x Ps / (Pp+ (r x Ps))
where:
Es = the per share exercise price of the spin-off warrants;
Eo = the per share exercise price of the Vishay warrants;
Pp = the average of the daily market prices of our common stock for
the ten consecutive trading days following the date on which the
spin-off is consummated;
r = the number of spin-off shares, which may be one or a fraction
less than or greater than one, distributed in the spin-off in
respect of each share of our common stock; and
16
Ps = the average daily market price of the spin-off shares for the ten
consecutive trading days following the date of the spin-off. If,
however, shares do not begin trading within two trading days
after the date of the spin-off or do not trade for at least ten
consecutive trading days within 20 days after the spin-off, then
this quantity will mean the per share fair market value of the
spin-off shares as of the date of the spin-off, determined by an
investment banking firm of national reputation and standing
selected by us and reasonably acceptable to a majority of the
warrant holders on the record date for the spin-off.
Following the spin-off, the exercise price of each Vishay warrant will be
adjusted by multiplying the exercise price by the ratio of the market value of a
share of Vishay stock, averaged over a specified period following the spin-off,
to the combined value of Vishay shares and spin-off shares, averaged over the
same period, that Vishay stockholders will hold following the spin-off for each
share of Vishay stock that they held prior to the spin-off. The formula for this
adjustment is as follows:
En = Eo x Pp / (Pp+ (r x Ps))
where:
En = the adjusted exercise price of the warrants per share of our
common stock,
with the other symbols in the formula having the meanings specified in
the preceding formula.
If distribution of spin-off shares to the warrant holders would, in the
reasonable opinion of our counsel, prevent the tax-free nature of the spin-off
or require us to register the spin-off with the SEC when we would not otherwise
be required to do so, then the warrant holders will not receive warrants in the
spin-off company. Instead, the number of shares issuable upon exercise of a
Vishay warrant will be increased by the ratio of the combined value of Vishay
shares and spin-off shares, averaged over a specified period following the
spin-off, that Vishay stockholders will hold following the spin-off for each
share of Vishay stock that they held prior to the spin-off to the market value
of a Vishay share, averaged over the same period. The formula for this increase
is as follows:
N = No x (Pp + (r x Ps))/Pp
where:
N = the adjusted number of shares issuable upon exercise of a
warrant;
No = the number of shares issuable upon exercise of the warrant prior
to adjustment,
with the other symbols in the formula having the meanings specified in the
second preceding formula.
In this case, the exercise price of the warrants will be decreased by the
ratio of the number of shares of Vishay stock issuable upon exercise of a
warrant prior to the spin-off to the number of Vishay shares issuable upon
exercise following the spin-off. The formula for this decrease is as follows:
En = Eo x (No/N)
where:
En = the adjusted exercise price of the warrants per share of our
common stock; and
Eo = the exercise price per share of our common stock of the warrants
immediately prior to adjustment for the spin-off;
with the other symbols in the formula having the meanings specified in
the preceding formula.
We will give the warrant holders notice of any spin-off at least ten business
days prior to the record date for the spin-off.
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Warrant Agent
We have appointed our transfer agent, American Stock Transfer & Trust Co.,
to serve as warrant agent. The warrant agent will issue, transfer and exchange
the certificates for the warrants. Upon exercise of the warrants by the warrant
holders, the warrant agent will notify us to issue or cause to be issued the
certificates representing the appropriate number of shares of our common stock
or other consideration issuable upon exercise of those warrants.
We have agreed to pay the warrant agent reasonable compensation for its
services and to reimburse us for its reasonable expenses. We have also agreed to
indemnify the warrant agent from all damages arising in connection with the
warrant agent's execution of its duties and powers under the warrant agreement,
except for any damages arising as a result of the warrant agent's gross
negligence or willful misconduct.
The warrant agent may resign upon 30 days' prior written notice. At least
15 days before the effective date of the resignation, the warrant agent will, at
our expense, cause to be mailed a copy of its notice of resignation to each
warrant holder. Upon the resignation of the warrant agent, we may, in our sole
discretion, appoint a new warrant agent. If we do not appoint a new warrant
agent within 30 days after we have been notified in writing of the former
warrant agent's resignation, then any warrant holder may apply to a court for
the appointment of a new warrant agent. Each new warrant agent will have the
same powers, rights, duties and responsibilities as if it had been originally
named as the warrant agent.
Warrant Holder Not a Stockholder
Neither the warrant agreement nor any of the warrants entitles any warrant
holder to any voting or other rights of a holder of shares of our common stock.
Transfer and Exercise of Warrants
Each warrant may be presented for transfer at any time on or prior to its
expiration date, after which date each warrant will become wholly void and of no
value. Any proposed transfer of the warrants must be made pursuant either to an
exemption from the registration requirements of the Securities Act or to an
effective registration statement. In addition, each transfer must be made in
accordance with the applicable securities laws of any state of the United States
or any other applicable jurisdiction.
Prior to any transfer, a warrant holder must deliver written notice to us
and to the warrant agent of his, her or its intention to transfer the warrants.
If the transfer of the warrants is being made pursuant to an exemption from the
registration requirements of the Securities Act, then we may also require that
the warrant holder deliver to us an agreement by the transferee to be bound by
certain restrictions on transfer set forth in the warrant agreement. We may also
require an opinion of counsel that the transfer complies with applicable
securities laws.
The warrant agent will register all transfers of outstanding warrant
certificates in the warrant register. Upon registration of the transfer, the
warrant agent will issue a new warrant certificate to the transferee and cancel
the surrendered warrant certificate.
If any warrant holder sells shares of our common stock issuable upon
exercise of the warrants in an underwritten public offering, then we will
cooperate with the warrant holders and the underwriters to ensure that the
warrants may be exercised and the underlying shares of common stock delivered to
the underwriters for sale in the offering. Upon consummation of the offering,
the underwriters will deliver the exercise price of the warrants to us.
If any initial warrant holder or its affiliates sells shares of our common
stock issuable upon exercise of the warrants in a "block trade", then we will
cooperate with the warrant holders and the broker in the trade so that the
warrants may be exercised and the underlying shares of common stock delivered to
the broker. Upon consummation of the trade, the broker will deliver the exercise
price of the warrants to us. A block trade means the disposition at a single
time in a single transaction by one or more initial holders of not less than
1,000,000 warrant shares in the aggregate to one or more "institutional
investors" or purchasers procured by a broker on behalf of such initial holders.
This number of warrant shares is subject to adjustments for stock splits,
reverse stock splits and similar
18
transactions. An institutional investor means, for purposes of the warrant
agreement, any insurance company, pension fund, mutual fund, investment company,
commercial bank or investment bank, or any portfolio managed by any of these
entities.
REGISTRATION RIGHTS
The following summary description of the registration rights sets forth a
summary of the terms and provisions of the registration rights relating to the
warrants and the shares of our common stock issuable upon exercise of the
warrants and exchange of the notes, provided in the securities investment and
registration rights agreement. The summary does not purport to be complete and
is qualified in all respects by reference to the actual text of the securities
investment and registration rights agreement, a copy of which has been filed as
an exhibit to the registration statement of which this prospectus is a part. We
urge you to read the text of the registration rights agreement because that
document, and not this description, defines your complete rights as a warrant
holder and a note holder.
We have entered into a securities investment and registration rights
agreement in which we agreed to file at our expense, no later than 30 days after
the closing date of our issuance of the warrants and the notes, a shelf
registration statement covering:
o resales of the warrants;
o resales of the shares of our common stock issuable upon exchange of
the notes;
o resales of the shares of our common stock issuable upon exercise of
the warrants, but only by the initial holders of the warrants or
their affiliates or in an underwritten public offering; and
o our sale of the shares of our common stock issuable upon exercise of
the warrants.
In addition, if for any reason we cannot register our sale of the shares
issuable upon exercise of the warrants, we are obligated to register those
shares for resale by the holders of those shares.
This prospectus is part of a registration statement that we filed to meet
our obligations under the registration rights agreement.
We are required to use our reasonable best efforts to cause the
registration statement to be declared effective under the Securities Act by the
date that is 180 days after the date of our issuance of the warrants and the
notes. However, we have not been able to meet this deadline. Upon effectiveness
of the registration statement, we will have no further obligation to register
securities under the registration rights agreement, unless we effect a spin-off.
If a spin-off were to occur and holders received warrants or notes of the
spin-off entity, we would be required to cause the spin-off entity to register
its securities in a manner similar to the registration of the Vishay securities
under the registration statement. In addition, we are required to use our
reasonable best efforts to maintain the effectiveness of the registration
statement:
o in the case of the securities registered for resale, until four
months after the tenth anniversary of our issuance of the warrants
and the notes, or, if earlier, until there are no outstanding resale
securities; and
o in the case of the registration of the shares issuable upon exercise
of the warrants, until the tenth anniversary of the date the
warrants were issued or, if earlier, until all of the warrants have
been exercised.
Underwritten Public Offerings. We granted rights to effect the disposition
of shares of our common stock issuable upon exercise of the warrants or exchange
of the notes in an underwritten public offering.
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On demand of the holders, we are required to effect up to two underwritten
public offerings of the shares of our common stock issuable upon exercise of the
warrants. We are not required to effect more than one of these offerings in any
12-month period or unless the aggregate size of the offering is at least
3,000,000 shares. This number is subject to adjustment for stock splits, reverse
splits and similar transactions. Further, in the case of an underwritten public
offering in which the warrants will be exercised in connection with the
offering, we are not required to effect an underwritten offering unless the per
share price of our common stock exceeds a minimum price. This minimum price is
the lesser of $1.00 more than the then exercise price of the applicable warrants
and five percent more than the exercise price of the applicable warrants. This
price must be exceeded on each of 20 trading days in any 30 trading day period,
and the warrant holders making the demand for the underwritten offering must
provide us with written notice of the demand no later than five business days
following this 30-day trading period.
Similarly, on demand of the holders, we are required to effect up to two
underwritten public offerings of the shares of our common stock issued or
issuable upon exchange of the notes. We are not required to effect more than one
of these offerings in any 12-month period or unless the aggregate size of the
offering is at least 3,000,000 shares. This number is subject to adjustment for
stock splits, reverse splits and similar transactions.
If we effect a spin-off and warrants and notes of the spin-off company are
distributed to the warrant holders and the note holders in partial substitution
of the warrants and the notes, we are required to cause the spin-off company, on
demand, to effect underwritten public offerings of the common stock issued or
issuable on exercise of the spin-off warrants and the spin-off notes. The
spin-off company will not be obligated to effect more than four of these
underwritten offerings in total, of which the holders of spin-off warrants and
the holders of spin-off notes will each be entitled to two of these offerings.
The spin-off company will not required to effect more than one of each of these
offerings in any 12-month period or unless the offering will result in gross
proceeds of not less than $30,000,000.
If we propose to register any of our securities under the Securities Act,
either for our account or for the account of other securityholders, for sale in
an underwritten public offering, we will give each holder of shares of our
common stock issuable upon exercise of the warrants and exchange of the notes
notice of the registration. We will include in the registration statement and
the underwritten offering the shares issued or issuable on exercise of the
warrants or issued or issuable on exchange of the notes of holders that request
inclusion. The right of the holders to participate in such an offering does not
apply to an underwritten offering made pursuant to a draw down off of a shelf
registration statement. Also, this right of participation is subject to
customary cutbacks if the managing underwriters for the offering advise us that
the size of the proposed offering is sufficiently large to materially adversely
affect the success of the proposed public offering.
We also have the right to include securities sold for our benefit in an
underwritten public offering effected on demand of the warrant holders or the
note holders. This right of participation is subject to customary cutbacks if
the managing underwriters for the offering advise us that the size of the
proposed offering is sufficiently large to materially adversely affect the
success of such proposed public offering.
Deferral and Holdback Events. We will be permitted to suspend the filing
of any registration statement and/or to request that the holders refrain from
effecting any public sales or distributions of securities under a registration
statement that we file in accordance with the registration rights agreement for
a period not to exceed 45 consecutive days or an aggregate of 90 days during any
12-month period. We are entitled to require this suspension under circumstances
in which our board of directors determines that either the registration of the
securities or the disclosure of a material event or transaction required to be
disclosed would have a material adverse effect on our business, assets,
condition results of operations or prospects or would jeopardize the success of
the transaction.
If we effect a public underwritten offering for the sale of shares for our
benefit or for the benefit of the another securityholder and the managing
underwriters for the offering so require, the holders will be prohibited from
effecting any public sale or distribution of securities of Vishay, except as
part of the offering, during the period beginning seven days prior to the
closing date of the offering and ending on the earlier of 90 days after the
closing date and the date such sale or distribution is permitted by the managing
underwriter or underwriters. This limitation will not apply to any holder who,
together with its affiliates and any person with whom it is acting together,
beneficially owns less than 2% of our outstanding common stock.
20
General. We will give notice of the effectiveness of the registration
statement to all holders who have provided us with a selling securityholder
notice and questionnaire. Each holder must complete the notice and questionnaire
at least five business days before the effective date of the registration
statement in order to be named as a selling securityholder in this prospectus.
If we receive completed questionnaires from holders after the effectiveness of
the registration statement, we will, as promptly as practicable, file amendments
or supplements to the registration statement naming those holders as selling
securityholders, thereby allowing them to sell their securities under the
registration statement.
We will pay all registration expenses, except that the selling
securityholders will pay all underwriting discounts, commissions or fees
attributable to their resale of securities under the registration statement.
The selling securityholders and we have agreed to indemnify each other and
our respective controlling persons against, and in certain circumstances to
provide contribution with respect to, specific liabilities in connection with
the offer and sale of the warrants and the common stock underlying the notes and
the warrants under the registration statement, including liabilities under the
Securities Act.
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
The following discussion sets forth the material U.S. federal income tax
consequences to holders, and U.S. estate tax consequences to non-U.S. Holders
(defined below), relating to the ownership, exercise and disposition of Vishay
common stock and the warrants described herein to purchase Vishay common stock.
The discussion constitutes the opinion of Kramer Levin Naftalis & Frankel LLP,
subject to the qualifications set forth in the opinion letter provided by Kramer
Levin to Vishay, which is filed as an exhibit to the registration statement of
which this prospectus is a part. The discussion which follows is based on the
U.S. Internal Revenue Code of 1986, as amended, Treasury Regulations promulgated
thereunder, administrative rulings and pronouncements and judicial decisions as
of the date hereof, all of which are subject to change, possibly with
retroactive effect. Any such change could alter the tax consequences discussed
in this document. No ruling has been sought from the Internal Revenue Service
with respect to the federal tax consequences discussed in this prospectus, and
there can be no assurance that the IRS or a court will not take a position
contrary to the federal tax consequences discussed herein or that any contrary
position taken by the IRS or a court would not be sustained.
The discussion below does not address the effects of any state, local or
non-U.S. tax laws. In addition, the discussion below relates to persons who hold
Vishay common stock and warrants to purchase Vishay common stock as capital
assets. The tax treatment of a holder may vary depending upon the holder's
particular situation, and certain holders may be subject to special rules not
discussed below, including for example, partners of entities classified as
partnerships for U.S. federal income tax purposes that hold Vishay common stock
and/or warrants, persons who hold Vishay common stock and/or warrants through
entities which are disregarded for U.S. federal income tax purposes, regulated
investment companies, insurance companies, tax-exempt organizations, U.S.
expatriates, financial institutions, dealers in securities or foreign
currencies, or holders who hold our common stock and/or warrants as part of a
"straddle," "hedge," conversion, constructive sale or another integrated
transaction for tax purposes, or U.S. Holders, as defined below, whose
functional currency is not the U.S. dollar.
Investors considering the purchase of common stock and/or warrants should
consult their own tax advisors with respect to the application of the U.S.
federal income and estate tax laws to their particular situations as well as any
tax consequences arising under the laws of any state, local or foreign taxing
jurisdiction or under any applicable tax treaty.
As used in this section, a "U.S. Holder" means a beneficial owner of
Vishay common stock and/or warrants that is, for U.S. federal income tax
purposes:
o a citizen or resident of the U.S.;
o a corporation or an entity treated as a corporation for U.S. federal
income tax purposes created or organized in or under the laws of the
U.S. or any political subdivision thereof;
o an estate whose income is subject to U.S. federal income tax
regardless of its source; or
21
o a trust if (i) in general, a court within the U.S. is able to
exercise primary supervision over its administration and one or more
U.S. persons have authority to control all substantial decisions of
the trust or (ii) it has a valid election in effect under applicable
U.S. treasury regulations to be treated as a U.S. person.
As used in this section, a non-U.S. Holder is a beneficial owner of Vishay
common stock and/or warrants that is not a U.S. Holder.
For U.S. federal income tax purposes, income earned through a partnership
or an entity treated as such for U.S. federal income tax purposes generally is
attributed to its owners.
U.S. Holders
Warrants
A U.S. Holder that exercises his, her or its warrants should not recognize
income, gain or loss for U.S. federal income tax purposes as a result of such
exercise, except that any cash paid in lieu of issuing fractional shares will be
treated as received in exchange for an applicable number of warrant(s) or
fraction thereof and the holder will recognize gain or loss on such exchange in
the manner discussed below. A U.S. Holder's tax basis in common stock acquired
upon exercise of his, her or its warrants should equal such holder's tax basis
in his, her or its exercised warrants (which, in the case of initial holders of
warrants, in general should equal their fair market value on the date of
issuance to the initial U.S. Holder) plus the exercise price paid for such
stock. The holding period for the common stock acquired upon exercise of
warrants should begin on the date the warrants are exercised. If a U.S. Holder's
warrants expire unexercised, the holder should have a capital loss equal to his,
her or its tax basis in its unexercised warrants. The deductibility of capital
losses, if any, realized on the expiration of unexercised warrants may be
subject to certain limitations.
Upon the sale, exchange or other taxable disposition of warrants, a U.S.
Holder generally will recognize capital gain or loss equal to the difference
between (i) the amount of cash and the fair market value of any property
received upon the disposition and (ii) the U.S. holder's adjusted tax basis in
the warrants. Such gain or loss will be long-term if the U.S. Holder's holding
period is more than one year. Under recently enacted legislation, long-term
capital gains recognized by non-corporate U.S. Holders will be taxed at a
maximum rate of 15% through 2008.
The exercise price of the warrants may be adjusted under certain
circumstances. Section 305 of the Code treats certain actual or constructive
distributions of stock with respect to stock or convertible securities as a
distribution taxable as a dividend (to the extent of the issuer's current and
accumulated earnings and profits as of the end of the taxable year in which the
distribution occurs). Under applicable Treasury regulations, an adjustment to
the exercise price of warrants may, under certain circumstances, be treated as a
constructive dividend under these rules to the extent it increases the
proportional interest of a U.S. Holder in Vishay's fully diluted common stock,
whether or not the holder ever exercises the warrants into common stock.
Generally, a holder's tax basis in a warrant will be increased by the amount of
any constructive dividend. Similarly, a failure to adjust the conversion price
of the warrants to reflect a stock dividend or similar event could in some
circumstances give rise to constructive dividend income to holders of common
stock.
Stock
If Vishay makes distributions on its common stock, those distributions
generally will be treated as a dividend, subject to tax as ordinary income, to
the extent of Vishay's current and accumulated earnings and profits as of the
end of its taxable year in which the distribution occurs. Any excess will be
treated as a tax-free return of capital to the extent of the U.S. Holder's
adjusted tax basis in the common stock and thereafter as gain from the sale or
exchange of that stock. Subject to applicable rules, U.S. Holders that are
corporations may be eligible to claim a deduction equal to a portion of any
distributions received treated as dividends. Under recently enacted legislation,
dividends and long-term capital gains recognized by non-corporate U.S. Holders
will be taxed at a maximum rate of 15% through 2008.
22
Upon the sale, exchange or other taxable disposition of Vishay common
stock, a U.S. Holder generally will recognize capital gain or loss equal to the
difference between (i) the amount of cash and the fair market value of any
property received upon the disposition and (ii) the U.S. Holder's adjusted tax
basis in the common stock or warrants, as applicable. Such gain or loss will be
long-term if the U.S. Holder's holding period is more than one year.
Non- U.S. Holders
For purposes of the following discussion, dividends on Vishay common stock
and gain from the sale or other disposition of Vishay common stock and/or
warrants will be considered to be "U.S. trade or business income" if such income
or gain is (i) effectively connected with the conduct of a U.S. trade or
business and (ii) in the case of a treaty resident, attributable to a permanent
establishment in the United States.
Warrants
A non-U.S. Holder that exercises his, her or its warrants should not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such exercise (except that any cash paid in lieu of issuing fractional shares
will be treated as received in exchange for an applicable number of warrant(s)
or fraction thereof). A non-U.S. Holder generally will not be subject to U.S.
federal income tax on any gain from the sale, exchange or other disposition of
warrants, other than in those instances set forth below in which a non-U.S.
Holder would be subject to tax upon the sale or disposition of common stock. See
"Non-U.S. Holders--Stock" below. A non-U.S. Holder's bases and holding periods
in the warrants and in common stock received upon exercise of the warrants are
computed in the same manner as a U.S. Holder would compute such items. See "U.S.
Holders--Warrants" above.
As discussed above, an adjustment to the exercise price of the warrants
could potentially give rise to a deemed distribution to holders of the warrants.
See "U.S. Holders--Warrants" above. With respect to non-U.S. Holders, the deemed
distribution would be subject to the rules below regarding withholding of U.S.
federal tax on dividends in respect of common stock. See "Non-U.S.
Holders--Stock" below.
Stock
If Vishay makes distributions on its common stock, such distributions will
constitute dividends for U.S. federal income tax purposes to the extent of its
current and accumulated earnings and profits, as determined for U.S. federal
income tax purposes, as of the end of its taxable year in which the distribution
occurs.
In general, dividends paid to a non-U.S. Holder that are not U.S. trade or
business income will be subject to withholding of U.S. federal income tax at a
30% rate unless such rate is reduced by an applicable income tax treaty. In
order to obtain a reduced rate of withholding under an income tax treaty, a
non-U.S. Holder generally will be required to provide a properly completed and
executed IRS Form W-8 BEN (or successor form) to Vishay or its paying agent, or
similar appropriate documentation or substitute form, certifying the non-U.S.
Holder's entitlement to benefits under an applicable income tax treaty. A
non-U.S. Holder that is eligible for a reduced rate of U.S. withholding tax
pursuant to an income tax treaty generally may obtain a refund of any excess
amounts withheld by filing an appropriate claim for a refund with the IRS.
Dividends that are U.S. trade or business income generally will not be
subject to withholding of U.S. federal income tax if the non-U.S. Holder
provides a properly completed and executed IRS Form W-8ECI (or successor form)
to Vishay or its paying agent, or similar appropriate documentation or
substitute form, certifying that the dividends are U.S. trade or business
income. Instead, dividends that are U.S. trade or business income generally will
be subject to U.S. federal income tax on a net income basis at the regular
graduated U.S. federal income tax rates. Any dividends that are U.S. trade or
business income received by a non-U.S. Holder that is a corporation may also,
under certain circumstances, be subject to an additional "branch profits tax" at
a 30% rate or such lower rate as may be specified by an applicable income tax
treaty.
A non-U.S. Holder generally will not be subject to U.S. federal income
tax on the sale or other disposition of common stock unless:
23
o such gain is U.S. trade or business income, in which case the
non-U.S. Holder would be taxed on the net gain derived from the sale
or other disposition under the regular graduated U.S. federal income
tax rates. In addition, a non-U.S. Holder that is a corporation may
be subject to an additional "branch profits tax" at a rate of 30% or
a lower rate as may be specified by an applicable income tax treaty;
o the non-U.S. Holder is a non-resident alien individual who holds the
common stock as a capital asset, is present in the United States for
183 days or more during the taxable year of the disposition, and
certain other conditions are present, in which case such non-U.S.
Holder generally will be subject to a flat 30% tax on the gain
derived from the sale or other disposition of the common stock; or
o Vishay is or has been a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code at
any time during the shorter of the five-year period ending on the
date of the sale or other disposition of the common stock or the
period during which the non-U.S. Holder has held the common stock.
Vishay believes that it has not been, is not currently, and is not likely
to become in the future, a "United States real property holding corporation"
within the meaning of Section 897(c)(2) of the Code. However, no assurance can
be given that Vishay will not be a "United States real property holding
corporation" when a non-U.S. Holder sells his, her or its shares of common
stock. If Vishay were to become a "United States real property holding
corporation," a non-U.S. Holder would still not be subject to U.S. federal
income tax on the sale or other disposition of the common stock if the shares of
common stock are considered to be "regularly traded on an established securities
market" within the meaning of Section 897(c)(3) of the Code and the non-U.S.
Holder does not own, actually or constructively, at any time during the shorter
of the periods described above, more than five percent of the outstanding shares
of Vishay's common stock.
Federal Estate Tax
Vishay common stock or warrants owned or treated as owned by an individual
who is not a citizen or resident of the United States for U.S. federal estate
tax purposes at the time of death (or Vishay common stock or warrants previously
held by such an individual who transferred the stock or warrants subject to
certain retained rights or powers) will be included in the individual's gross
estate for U.S. federal estate tax purposes, and may be subject to U.S. federal
estate tax, unless otherwise provided by an applicable estate tax treaty.
Backup Withholding and Information Reporting
Non-exempt U.S. Holders may be subject to information reporting with
respect to payments of proceeds from the disposition of Vishay common stock and
dividends on Vishay common stock. Non-exempt U.S. Holders who are subject to
information reporting and who do not provide appropriate information when
requested may be subject to backup withholding. U.S. Holders should consult
their tax advisors.
Vishay must report annually to the IRS and to each non-U.S. Holder any
dividend income that is subject to withholding, or that is exempt from U.S.
withholding tax pursuant to a tax treaty. Copies of these information returns
may also be made available, under the provisions of a specific treaty or
agreement, to the tax authorities of the country in which the non-U.S. Holder
resides. In general, backup withholding will not apply to dividends on common
stock made by Vishay or its paying agent, in its capacity as such, to a non-U.S.
Holder if the holder has provided the required certification that it is not a
U.S. person. If a non-U.S. Holder fails to provide the required certification,
distributions on common stock may be subject to backup withholding in certain
circumstances.
In general, backup withholding and information reporting will not apply to
the proceeds from the disposition of common stock paid to a non-U.S. Holder if
the holder has provided the required certification that it is not a U.S. person.
If a non-U.S. Holder fails to provide the required certification, proceeds from
the disposition of common stock may be subject to backup withholding and
information reporting in certain circumstances.
Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules from a payment to any holder will be allowed as a
refund or a credit against such holder's U.S. federal income tax liability
provided the requisite procedures are followed.
24
SELLING SECURITYHOLDERS
The selling securityholders, including their transferees, pledgees, donees
or successors may, from time to time, offer and sell the warrants or the common
stock issuable upon exchange of the notes pursuant to this prospectus. In
addition, the initial holders of the warrants and their affiliates may sell
shares issuable upon exercise of the warrants pursuant to this prospectus, and
all holders of warrants may sell shares issuable upon exercise of the warrants
pursuant to this prospectus in an underwritten public offering, if the exercise
is in connection with the sale of the shares, or as otherwise provided in this
prospectus. Our registration of the warrants and the common stock underlying the
notes and the warrants does not necessarily mean that the selling
securityholders will sell all or any of these securities.
The following table sets forth certain information as of September 30,
2003 concerning the warrants and common stock of the selling securityholders.
We have assumed for purposes of the table below that the selling
securityholders will exchange all of the notes and exercise all of the warrants
owned and being offered under this prospectus. We have also assumed that the
selling securityholders will sell all of the note exchange shares and warrant
shares. In addition, the selling securityholders identified below may have sold,
transferred or otherwise disposed of all or a portion of their notes or warrants
since the date on which they provided information regarding their securities in
transactions exempt from the registration requirements of the Securities Act.
Shares of Common
Stock Beneficially
Owned Upon
Completion
the Offering
Shares of ----------------------
Shares Shares Common Stock
Issuable on Issuable on Beneficially Number
Exchange Exercise of Owned Before of
of Notes Class A Class B Warrants the Offering Shares
Name (1) (2) Warrants Warrants (3) (4) (5) Percentage
- -------------------------------------- ------------ --------- ---------- ------------ ------------- --------- ----------
Phoenix Bermuda L.P.* (6) 237,529 6,540,296 1,703,774 8,244,070 -- -- --
European Private Equity Investors -- 459,704 119,755 579,459 -- -- --
L.L.C.* (7)
Sankaty High Yield Asset Partners 531,000 -- -- -- -- -- --
L.P.* (8)
BCM Capital Partners L.P.* (9) 359,588 -- -- -- -- -- --
BCIP Associates II* (10) 2,000 -- -- -- -- -- --
BCIP Trust Associates II* (11) 9,764 -- -- -- -- -- --
JP Morgan Partners (BHCA) L.P.* (12) 2,794,588 -- -- -- -- -- --
GarMark Partners L.P.* (13) 1,747,058 -- -- -- -- -- --
BCIP Trust Associates II-B* (14) 176 -- -- -- -- -- --
Bain Capital V Mezzanine Fund L.P.* (15) 494,764 -- -- -- -- -- --
- -------------------------
* Denotes initial holder or its affiliate.
(1) Information concerning any change to the selling securityholders will be
set forth in prospectus supplements or post-effective amendments to the
registration statement from time to time, if required.
(2) Figures in this column assume that the selling securityholder will
exchange in full the notes held by them.
(3) Figures in this column assume that the selling securityholder will
exercise in full the warrants held by them and include the total number of
shares of common stock issuable upon exercise of the class A warrants and
the class B warrants.
(4) Figures in this column do not include the shares of common stock issuable
upon exchange of the notes or exercise of the warrants.
(5) Assumes that all securities offered by this prospectus are sold.
25
(6) Phoenix Bermuda L.P. is a Bermuda limited partnership whose sole general
partner is Compass Capital Partners Limited, a company incorporated in
Bermuda. Stephen Waters, Gavin Arton and James Keyes are directors of
Compass Capital Partners Limited and therefore may be deemed to have
shared voting and investment control with respect to securities held by
Phoenix Bermuda L.P. Messrs. Waters, Arton and Keyes disclaim beneficial
ownership of such securities except to the extent of their pecuniary
interest in them.
(7) The sole beneficial owner of European Private Equity Investors L.L.C. is
General Electric Pension Trust ("GEPT"), which is a pension trust for
employees of General Electric Company ("GE") and its subsidiaries. GEPT's
investment manager is GE Asset Management Incorporated, a registered
investment advisor and wholly-owned subsidiary of GE. GEPT may be deemed
to be an affiliate of a registered broker-dealer by virtue of the fact
that GEPT may be deemed to be "under common control" with any NASD members
affiliated with GE. In addition, individuals who are trustees of GEPT may
be directors or officers of registered broker-dealers that are affiliated
with GE. However, as an entity subject to ERISA, GEPT is operated solely
in the interest of its beneficiaries and, therefore, no GE entities other
than GEPT and its wholly-owned affiliates (none of which are NASD members)
have a beneficial or pecuniary interest in the securities being offered
under this registration statement.
(8) Sankaty High Yield Asset Partners L.P. is a Delaware limited partnership
whose sole general partner is Sankaty High Yield Asset Investors, LLC,
whose sole managing member is Sankaty Investors, LLC. Mr. Jonathan S.
Lavine is the sole managing member of Sankaty Investors and, accordingly,
may be deemed to beneficially own the shares held by Sankaty High Yield
Asset Partners. Mr. Lavine disclaims beneficial ownership of such shares
except to the extent of his pecuniary interest in them.
(9) BCM Capital Partners L.P. is a Delaware limited partnership whose sole
general partner is Bain Capital V Mezzanine Partners, L.P., whose sole
general partner is Sankaty Investors. Mr. Lavine is the sole managing
member of Sankaty Investors and, accordingly, may be deemed to
beneficially own the shares held by BCM Capital Partners. Mr. Lavine
disclaims beneficial ownership of such shares except to the extent of his
pecuniary interest in them.
(10) BCIP Associates II is a Delaware general partnership whose managing
partner is Bain Capital Investors, LLC. Accordingly, by virtue of its
relationship to BCIP Associates II, Bain Capital Investors may be deemed
to beneficially own the shares held by BCIP Associates II. Bain Capital
Investors disclaims beneficial ownership of all such shares except to the
extent of its pecuniary interest in them.
(11) BCIP Trust Associates II is a Delaware general partnership whose managing
partner is Bain Capital Investors. Accordingly, by virtue of its
relationship to BCIP Trust Associates II, Bain Capital Investors may be
deemed to beneficially own the shares held by BCIP Trust Associates II.
Bain Capital Investors disclaims beneficial ownership of all such shares
except to the extent of its pecuniary interest in them.
(12) The general partner of JP Morgan Partners (BHCA) L.P. is JPMP Master Fund
Manager L.P. The general partner of JPMP Master Fund Manager is JPMP
Capital, LLC. The manager who is ultimately responsible for directing the
voting and disposition of the securities held by JP Morgan Partners (BHCA)
L.P. is Jeffrey C. Walker. JP Morgan Partners (BHCA) L.P. is an affiliate
of JP Morgan Securities, Inc., an SEC-registered broker-dealer.
(13) The general partner of GarMark Partners L.P. is GarMark Associates L.L.C.
E. Garrett Bewkes, III and Mark G. Solow are the managing members of
GarMark Associates and therefore these persons may be deemed to have
shared voting and investment control with respect to such shares.
(14) BCIP Trust Associates II-B is a Delaware general partnership whose
managing partner is Bain Capital Investors, LLC. Accordingly, by virtue of
its relationship to BCIP Trust Associates II-B, Bain Capital Investors may
be deemed to beneficially own the shares held by BCIP Trust Associates
II-B. Bain Capital Investors disclaims beneficial ownership of all such
shares except to the extent of its pecuniary interest in them.
26
(15) Bain Capital V Mezzanine Fund L.P. is a Delaware limited partnership whose
sole general partner is Bain Capital V Mezzanine Partners, L.P., whose
sole general partner is Sankaty Investors. Mr. Lavine is the sole managing
member of Sankaty Investors and, accordingly, may be deemed to
beneficially own the shares held by BCM Capital Partners. Mr. Lavine
disclaims beneficial ownership of such shares except to the extent of his
pecuniary interest in them.
To the extent that any of the selling securityholders identified above are
broker-dealers, they are deemed to be, under interpretations of the Securities
and Exchange Commission, "underwriters" within the meaning of the Securities
Act.
With respect to selling securityholders that are affiliates of
broker-dealers, such entities acquired their securities in the ordinary course
of business and, at the time of the acquisition of such securities, such selling
securityholders had no agreements or understandings, directly or indirectly,
with any person to distribute the securities. To the extent that we become aware
that such selling securityholders did not acquire their securities in the
ordinary course of business or did have such an agreement or understanding, we
will file a post-effective amendment to the registration statement of which this
prospectus is a part to designate such affiliate as an "underwriter" within the
meaning of the Securities Act.
None of the selling securityholders has had any position, office or other
material relationship with Vishay or any of our predecessors or affiliates
within the past three years.
Only selling securityholders identified above who beneficially own the
securities set forth opposite each such selling securityholder's name in the
foregoing table on the effective date of the registration statement of which
this prospectus is a part may sell such securities under the registration
statement. Prior to any use of this prospectus in connection with a sale or
offering of the common stock underlying the notes, the warrants or the common
stock underlying the warrants by any holder not identified above, the
registration statement of which this prospectus is a part will be amended by a
post-effective amendment to set forth the name and aggregate amount of
securities beneficially owned by the selling securityholder intending to sell
such securities and the amount of such securities to be sold or offered. The
prospectus that will be a part of such a post-effective amendment will also
disclose whether any selling securityholder selling in connection with such
prospectus has held any position, office or other material relationship with
Vishay or any of our predecessors or affiliates within the three years prior to
the date of such prospectus if such information has not been disclosed herein.
PLAN OF DISTRIBUTION
The selling securityholders and their successors, which include their
pledgees, donees, partnership distributees and other transferees receiving the
warrants, the notes or the common stock underlying the notes from the selling
securityholders in non-sale transfers, may sell the warrants and the common
stock underlying the notes directly to purchasers or through broker-dealers or
agents. The common stock underlying the notes may also be sold to underwriters
in a firm commitment underwriting. The initial holders of the warrants and their
affiliates may sell the warrants and the common stock underlying the warrants
directly to purchasers or through broker-dealers, agents or underwriters in a
firm commitment underwriting. Other holders of the warrants may only sell the
common stock underlying the warrants pursuant to the prospectus:
o in a firm commitment underwritten public offering, where the
warrants are being exercised in connection with the offering; or
o if for any reason our registration of the shares of common stock
issuable upon exercise of the warrants is not effective.
Underwriters, broker-dealers or agents may receive compensation in the
form of discounts, concessions or commissions from the selling securityholders
or the purchasers. These discounts, concessions or commissions may be in excess
of those customary in the types of transactions involved. If the initial holders
of the warrants and their affiliates sell the warrants and the common stock
underlying the warrants within one-year after the date the warrants were issued,
they may be considered "underwriters" within the meaning of Section 2(11) of the
Securities Act.
27
The warrants and the common stock underlying the notes and the warrants
may be sold in one or more transactions:
o at fixed prices;
o at prevailing market prices at the time of sale;
o at varying prices determined at the time of sale; or
o at negotiated prices.
These sales may be effected in transactions, which may involve crosses or
block transactions, in the following manner:
o on any national securities exchange or quotation service on which
the warrants or the common stock underlying the notes and the
warrants may be listed or quoted at the time of sale;
o in the over-the-counter market;
o in transactions other than on these exchanges or services or in the
over-the-counter market;
o through the writing and exercise of options, whether these options
are listed on an options exchange or otherwise; or
o through the settlement of short sales.
If a material arrangement with any broker-dealer or other agent is entered
into for the sale of any securities through a secondary distribution, block
trade, special offering, exchange distribution or a purchase by a broker or
dealer, or if other material changes are made in the plan of distribution of the
securities, a prospectus supplement will be filed, if necessary, disclosing the
material terms of such arrangement. If a material arrangement with any
underwriter is entered into, a post-effective amendment will be filed, if
necessary, disclosing the material terms of such arrangement. If necessary or
appropriate, the warrants or the common stock to be sold, the names of the
selling securityholders, the respective purchase prices and public offering
prices, the names of any agent, dealer or underwriter, any applicable
commissions or discounts and the other material terms and conditions of a
particular offer will be set forth in an accompanying prospectus supplement or,
if a distribution is to be effected in the form of a firm commitment
underwriting, a post-effective amendment to the registration statement of which
this prospectus is a part.
If underwriters are used in the sale, the securities being sold will be
acquired by the underwriters for their own account and distribution of the
securities may be effected from time to time in one or more transactions at a
fixed price or prices, which may be changed, in a firm commitment underwriting.
Unless otherwise set forth in the prospectus supplement with respect of the
securities being offered thereby, the obligations of the underwriters to
purchase such securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all such securities if any of such
securities are purchased. The initial public offering price of any securities
and any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If dealers are used in the sale, unless otherwise indicated in the
prospectus supplement with respect to the securities being offered thereby, the
selling securityholder will sell such securities to the dealers as principals.
The dealers may then resell such securities to the public at varying prices to
be determined by such dealers at the time of resale.
Securities may also be sold through agents designated by the selling
securityholder from time to time or directly by the selling securityholder. Any
agent involved in the offering and sale of the securities in respect of which
this prospectus is being delivered will be named, and any commission payable by
the selling securityholder to
28
such agent will be set forth, in the prospectus supplement with respect to such
securities. Unless otherwise indicated in the prospectus supplement, any agent
will be acting on a best efforts basis for the period of its appointment.
Underwriters, dealers and agents who participate in the distribution of
the securities may be entitled under agreements entered into with the selling
securityholder to indemnification by the selling securityholder against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the underwriters, dealers or agents
may be required to make in respect thereof.
Selling securityholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of the warrants or the common stock underlying the notes and the
warrants and deliver these securities to close out short positions or loan or
pledge the warrants or the common stock underlying the notes and the warrants to
broker-dealers that in turn may sell these securities.
The aggregate proceeds to the selling securityholders from the sale of the
warrants or common stock underlying the notes and the warrants will be the
purchase price of the warrants or common stock less any discounts and
commissions, if applicable. A selling securityholder reserves the right to
accept and, together with its agents, to reject, any proposed purchase of
warrants or common stock to be made directly or through agents. We will not
receive any of the proceeds from the resale of these securities by the selling
securityholders. We may, however, receive cash consideration in connection with
the exercise of the warrants for cash.
In order to comply with the securities laws of some jurisdictions, if
applicable, the holders of warrants and the common stock underlying the notes
and the warrants may sell in some jurisdictions through registered or licensed
broker dealers. In addition, under certain circumstances in some jurisdictions,
the warrants may need to be registered or qualified for sale or comply with an
available exemption from the registration and qualification requirements of such
jurisdiction.
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 any securities by the selling
securityholders.
Our outstanding common stock is listed for trading on the New York Stock
Exchange. There is no established trading market for the warrants. We do not
intend to list the warrants for trading on any automated interdealer quotation
system or national securities exchange.
The selling securityholders and any underwriters, broker-dealers or agents
that participate in the sale of the warrants and common stock underlying the
notes and the warrants may be "underwriters" within the meaning of Section 2(11)
of the Securities Act. Any discounts, commissions, concessions or profits they
earn on any resale of the warrants or the shares of common stock underlying the
notes and the warrants may be underwriting discounts and commissions under the
Securities Act. Selling securityholders who are "underwriters" within the
meaning of Section 2(11) of the Securities Act will be subject to the prospectus
delivery requirements of the Securities Act. The selling securityholders have
acknowledged that they understand their obligations to comply with the
provisions of the Exchange Act and the rules thereunder relating to stock
manipulation, particularly Regulation M, and have agreed that they will not
engage in any transaction in violation of such provisions.
In addition, any securities covered by this prospectus that qualify for
sale pursuant to Rule 144 or Rule 144A under the Securities Act may be sold
under Rule 144 or Rule 144A rather than pursuant to this prospectus.
We entered into a registration rights agreement for the benefit of the
holders of the notes and the warrants. Pursuant to the registration rights
agreement, we agreed to register the warrants and the common stock underlying
the notes and the warrants with the SEC under specific circumstances and for
specific times. In addition, the selling securityholders and we have agreed to
indemnify each other and our respective controlling persons against, and in
certain circumstances to provide contribution with respect to, specific
liabilities in connection with the offer and sale of the warrants and the common
stock underlying the notes and the warrants, including liabilities under the
Securities Act. We will pay the expenses incident to the registration of the
warrants and the common stock underlying the notes and the warrants, except that
the selling securityholders will pay all underwriting discounts, commissions or
fees attributable to the sale of the securities and will pay the costs of their
own counsel.
29
LEGAL MATTERS
The validity of the warrants and the common stock underlying the notes and
the warrants is being passed upon for us 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/A) for the year ended December
31, 2002, 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.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any public offering document we
file, including a copy of the registration statement on Form S-3 of which this
prospectus is a part, without charge at the SEC's Public Reference Room, 450
Fifth Street, N.W., Room 1024, Washington D.C. 20549.
You can also request copies of all or any portion of these documents by
writing the Public Reference Section and paying certain prescribed fees. Please
call the SEC at 1-800-SEC-0330 for further information on the Public Reference
Section. Additionally, these documents are available to the public from the
SEC's web site at http://www.sec.gov. You can also inspect reports, proxy
statements and other information about us at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with the SEC. This means that we are disclosing important
information to you by referring to those documents. The information incorporated
by reference is considered to be part of this prospectus, except for any
information superseded by information contained directly in this prospectus.
Information that we file later with the SEC under the Exchange Act will
automatically update information in this prospectus. In all cases, you should
rely on the later information over different information included in this
prospectus. We incorporate by reference the documents listed below and any
future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act until this offering is completed:
o Annual Report on Form 10-K/A for the year ended December 31, 2002;
o Quarterly Report on Form 10-Q for the quarter ended March 31, 2003;
o Quarterly Report on Form 10-Q for the quarter ended June 30, 2003;
o Current Reports on Form 8-K filed on January 23, 2003, May 2, 2003,
May 7, 2003 and August 1, 2003, Current Report on Form 8-K/A filed
on February 26, 2003, and Current Report on Form 8-K filed on August
8, 2003;
o Definitive proxy statement on Schedule 14A filed on April 22, 2003;
and
o The description of our common stock set forth in our Registration
Statement on Form 8-A filed on December 27, 1983, including any
amendment or reports filed for the purpose of updating such
description.
You may request a copy of these filings, or any other documents or other
information referred to in, or incorporated by reference into, this prospectus,
at no cost, by writing or calling us at the following address or telephone
number:
30
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, Pennsylvania 19355-2120
Attention: Secretary
(610) 644-1300
Exhibits to the documents incorporated by reference will not be sent,
however, unless those exhibits have been specifically referenced in this
prospectus.
31
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses Of Issuance And Distribution
The Registrant is paying all of the expenses related to this offering. The
following table sets forth the approximate amount of fees and expenses payable
by the Registrant in connection with this Registration Statement and the
distribution of the shares of the securities being registered hereby. The
selling securityholders will bear all underwriting discounts, commissions or
fees attributable to the sale of the registrable securities.
SEC registration fee $22,853
Legal fees and expenses 75,000
Accounting fees and expenses 15,000
Printing and engraving expenses 25,000
Miscellaneous 12,147
---------
Total $150,000
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 Vishay, 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 Vishay, no indemnification shall be
made with respect to any matter as to which such person shall have been adjudged
to be liable to Vishay 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 Vishay shall be indemnified by
Vishay 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 of Vishay or in the opinion of independent legal
counsel, such person acted in good faith in what he reasonably believed to be in
the best interests of Vishay and was not adjudged liable to the corporation,
and, in any criminal action, had no reasonable cause to believe that his action
was unlawful. In the case of a derivative action, such indemnification shall not
be made other than in respect of a court approved settlement or if, in the
opinion of independent counsel, the person satisfied the standard of conduct
specified in the prior sentence, the action was without substantial merit, the
settlement was in the best interest of Vishay and the payment is permissible
under applicable law. Directors may authorize the advancement of reasonable
costs and expenses in connection with any such action to the extent permitted
under Delaware law. Vishay's certificate of incorporation further provides that
no director shall have any personal liability to Vishay or to its stockholders
for any monetary damages for breach of fiduciary duty, to the extent permitted
under the Delaware General Corporation Law.
Vishay maintains $100 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.
II-1
Item 16. Exhibits
Exhibit No. Description
- ------------ -----------
2.1 Share Sale and Purchase Agreement between Phoenix Acquisition
Company S.ar.l; Other Investors named therein; Mezzanine Lenders
(as defined); Vishay Intertechnology, Inc.; Vishay Europe Gmbh;
and BCcomponents International B.V., dated as of November 10,
2002 (incorporated by reference to Exhibit 2.1 to our Form 8-K
filed on December 23, 2002).
2.2 Amendment to the Share Sale and Purchase Agreement between
Phoenix Acquisition Company S.ar.l; Other Investors as named
therein; Mezzanine Lenders (as defined); Vishay Intertechnology,
Inc.; Vishay Europe Gmbh; and BCcomponents International B.V.,
dated as of December 4, 2002 (incorporated by reference to
Exhibit 2.2 to our Form 8-K filed on December 23, 2002).
3.1 Composite Amended and Restated Certificate of Incorporation of
Vishay. *
3.2 Amended and Restated Bylaws of Vishay Intertechnology, Inc.
(incorporated by reference to Exhibit 3.2 to our Form 8-K filed
on August 8, 2003).
4.1 Warrant Agreement between Vishay Intertechnology, Inc. and
American Stock Transfer & Trust Co., dated December 31, 2002
(incorporated by reference to Exhibit 4.1 to our Form 8-K filed
on December 23, 2002).
4.2 Note Instrument by Vishay Intertechnology, Inc., dated as of
December 13, 2002 (incorporated by reference to Exhibit 4.3 to
our Form 8-K filed on December 23, 2002).
5.1 Opinion of Kramer Levin Naftalis & Frankel LLP regarding the
legality of the warrants and the shares of Vishay common stock
registered hereunder (incorporated by reference to Exhibit 5.1 to
our registration statement on Form S-3, file no. 333-102507, as
filed with the Securities and Exchange Commission on January 14,
2003).
8.1 Opinion of Kramer Levin Naftalis & Frankel LLP regarding tax
matters (incorporated by reference to Exhibit 8.1 to our
registration statement on Form S-3, file no. 333-102507, as filed
with the Securities and Exchange Commission on January 14, 2003).
10.1 Securities Investment and Registration Rights Agreement by and
among Vishay Intertechnology, Inc. and the Original Holders (as
defined), dated as of December 13, 2002 (incorporated by
reference to Exhibit 4.4 to our Form 8-K filed on December 23,
2002).
10.2 Note Purchase Agreement between Vishay Intertechnology, Inc. and
Subscribers (as defined), dated December 13, 2002 (incorporated
by reference to Exhibit 4.2 to our Form 8-K filed on December 23,
2002).
10.3 Put and Call Agreement between Vishay Intertechnology, Inc. and
the Initial Holders (as defined), dated as of December 13, 2002
(incorporated by reference to Exhibit 4.5 to our Form 8-K filed
on December 23, 2002).
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of Kramer Levin Naftalis & Frankel LLP (included in
Exhibits 5.1 and 8.1).
24 Power of Attorney (incorporated by reference to Exhibit 24 to our
amendment no. 1 to our registration statement on Form S-3, file
no. 333-102507, as filed with the Securities and Exchange
Commission on August 8, 2003).
* Filed herewith.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:-
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-2
(ii) 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 low or high end of the estimated maximum aggregate
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b), if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) 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.
(2) That, for the purpose 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) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
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, Commonwealth of Pennsylvania, on the 3rd day
of October, 2003.
VISHAY INTERTECHNOLOGY, INC.
By: /S/ FELIX ZANDMAN
------------------------------
Felix Zandman
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 October 3,
2003 the capacities indicated below.
SIGNATURE TITLE
--------- -----
/S/ FELIX ZANDMAN Director, Chairman of the Board, and Chief
- -------------------------- Executive Officer (Principal Executive Officer)
DR. FELIX ZANDMAN
/S/ * Executive Vice President, Treasurer and Chief
- -------------------------- Financial Officer (Principal Financial and
RICHARD N. GRUBB Accounting Officer)
/S/ AVI D. EDEN Director, Vice Chairman of the Board and Executive
- -------------------------- Vice President
AVI D. EDEN
/S/ * Director
- --------------------------
PHILLIPE GAZEAU
/S/ * Director
- --------------------------
ELI HURVITZ
/S/ * Director, President and Chief Operating Officer
- --------------------------
GERALD PAUL
/S/ * Director
- --------------------------
DR. ABRAHAM LUDOMIRSKI
/S/ * Director
- --------------------------
DR. EDWARD B. SHILS
/S/ * Director
- --------------------------
ZIV SHOSHANI
/S/ * Director
- --------------------------
MARK I. SOLOMON
/S/ * Director
- --------------------------
JEAN-CLAUDE TINE
/S/ * Director
- --------------------------
MARC ZANDMAN
/S/ * Director
- --------------------------
RUTA ZANDMAN
* By /S/ AVI D. EDEN Attorney-in-Fact
- --------------------------
AVI D. EDEN
- -------------------------------------------------------------------------------
[OBJECT OMITTED]
EXHIBIT INDEX
Exhibit Description
------- -----------
2.1 Share Sale and Purchase Agreement between Phoenix Acquisition
Company S.ar.l; Other Investors named therein; Mezzanine Lenders
(as defined); Vishay Intertechnology, Inc.; Vishay Europe Gmbh;
and BCcomponents International B.V., dated as of November 10,
2002 (incorporated by reference to Exhibit 2.1 to our Form 8-K
filed on December 23, 2002).
2.2 Amendment to the Share Sale and Purchase Agreement between
Phoenix Acquisition Company S.ar.l; Other Investors as named
therein; Mezzanine Lenders (as defined); Vishay Intertechnology,
Inc.; Vishay Europe Gmbh; and BCcomponents International B.V.,
dated as of December 4, 2002 (incorporated by reference to
Exhibit 2.2 to our Form 8-K filed on December 23, 2002).
3.1 Composite Amended and Restated Certificate of Incorporation of
Vishay. *
3.2 Amended and Restated Bylaws of Vishay Intertechnology, Inc.
(incorporated by reference to Exhibit 3.2 to our Form 8-K filed
on August 8, 2003).
4.1 Warrant Agreement between Vishay Intertechnology, Inc. and
American Stock Transfer & Trust Co., dated December 31, 2002
(incorporated by reference to Exhibit 4.1 to our Form 8-K filed
on December 23, 2002).
4.2 Note Instrument by Vishay Technology, Inc., dated as of December
13, 2002 (incorporated by reference to Exhibit 4.3 to our Form
8-K filed on December 23, 2002).
5.1 Opinion of Kramer Levin Naftalis & Frankel LLP regarding the
legality of the warrants and the shares of Vishay common stock
registered hereunder (incorporated by reference to Exhibit 5.1 to
our registration statement on Form S-3, file no. 333-102507, as
filed with the Securities and Exchange Commission on January 14,
2003).
8.1 Opinion of Kramer Levin Naftalis & Frankel LLP regarding tax
matters (incorporated by reference to Exhibit 8.1 to our
registration statement on Form S-3, file no. 333-102507, as filed
with the Securities and Exchange Commission on January 14, 2003).
10.1 Securities Investment and Registration Rights Agreement by and
among Vishay Intertechnology, Inc. and the Original Holders (as
defined), dated as of December 13, 2002 (incorporated by
reference to Exhibit 4.4 to our Form 8-K filed on December 23,
2002).
10.2 Note Purchase Agreement between Vishay Intertechnology, Inc. and
Subscribers (as defined), dated December 13, 2002 (incorporated
by reference to Exhibit 4.2 to our Form 8-K filed on December 23,
2002).
10.3 Put and Call Agreement between Vishay Intertechnology, Inc. and
the Initial Holders (as defined), dated as of December 13, 2002
(incorporated by reference to Exhibit 4.5 to our Form 8-K filed
on December 23, 2002).
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of Kramer Levin Naftalis & Frankel LLP (included in
Exhibits 5.1 and 8.1).
24 Power of Attorney (incorporated by reference to Exhibit 24 to our
amendment no. 1 to our registration statement on Form S-3, file
no. 333-102507, as filed with the Securities and Exchange
Commission on August 8, 2003).
* Filed herewith.
Exhibit 3.1
COMPOSITE AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION
OF
VISHAY INTERTECHNOLOGY, INC.
AS OF AUGUST 3, 1995
-----------
FIRST: The name of the Corporation (hereinafter called the
"Corporation") is Vishay Intertechnology, Inc.
SECOND: The address, including street, number, city, and county, of
the registered office of the Corporation in the State of Delaware is 229 South
State Street, City of Dover, County of Kent; and the name of the registered
agent of the Corporation in the State of Delaware at such address is The
Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation are to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: Section 1. Classes and Number of Shares. The total number of
shares of all classes of stock which the Corporation shall have authority to
issue is 81,000,000 shares. The classes and the aggregate number of shares of
stock of each class which the Corporation shall have authority to issue are as
follows:
(i) 65,000,000 shares of Common Stock, $0.10 par value
per share (hereinafter the "Common Stock");
(ii) 15,000,000 shares of Class B Common Stock, $0.10
par value per share (hereinafter the "Class B Stock"); and
(iii) 1,000,000 shares of Preferred Stock, $1.00 par
value per share, with such rights, privileges, restrictions and
preferences as the Board of Directors may authorize from time to
time (hereinafter the "Preferred Stock").
Section 2. Powers and Rights of the Common Stock and the Class B
Stock.
A. Voting Rights and Powers.
(i) With respect to all matters upon which shareholders are
entitled to vote or to which shareholders are entitled to give consent,
every holder of Common Stock shall be entitled to one vote in person or by
proxy for each share of Common Stock standing in his name on the transfer
books of the Corporation and every holder of Class B Stock shall be
entitled to ten votes in person or by proxy for each share of
Class B Stock standing in his name on the transfer books of the
Corporation.
(ii) Except as otherwise provided herein and as may be
otherwise required by law, the provisions of these Amended and Restated
Articles of Incorporation shall not be modified, revised, altered or
amended, repealed or rescinded in whole or in part, unless authorized by a
majority of the votes of the outstanding shares of stock of the
Corporation entitled to vote, with each share of Common Stock and each
share of Class B Stock having the number of votes per share set forth in
clause (i) of this paragraph A.
(iii)Following the initial issuance of shares of Class B
Stock, the Corporation may not effect the issuance of any additional
shares of Class B Stock (except in connection with stock splits and stock
dividends) unless and until such issuance is authorized by the holders of
a majority of the outstanding shares of Common Stock of the Corporation
entitled to vote, and by the holders of a majority of the shares of the
outstanding shares of Class B Stock entitled to vote, each class voting
separately.
(iv) Except as provided in paragraph A(iii) and paragraph D of
this Section 2 and as may be otherwise required by law, the holders of
Common Stock and Class B Stock shall vote together as a single class,
subject to any voting rights which may be granted to holders of Preferred
Stock.
B. Dividends and Distributions. Subject to the rights of the holders
of Preferred Stock, and subject to any other provisions of this Amended and
Restated Certificate of Incorporation as amended from time to time, holders of
Common Stock and Class B Stock shall be entitled to such dividends and other
distributions in cash, stock or property of the Corporation as may be declared
thereon by the Board of Directors from time to time out of assets or funds of
the Corporation legally available therefor, provided that in the case of
dividends or other distributions payable in stock of the Corporation other than
the Preferred Stock, including distributions pursuant to stock split-ups,
divisions or combinations, which occur after the date shares of Class B Stock
are first issued by the Corporation, only shares of Common Stock shall be
distributed with respect to Common Stock and only shares of Class B Stock shall
be distributed with respect to Class B Stock. In no event will shares of either
Common Stock or Class B Stock be split, divided or combined unless the other is
also split, divided or combined equally.
C. Other Rights. Except as otherwise required by the Delaware
General Corporation Law or as otherwise provided in this Amended and Restated
Certificate of Incorporation, each share of Common Stock and each share of Class
B Stock shall have identical powers, preferences and rights, including rights in
liquidation.
D. Transfer.
(i) No person holding shares of Class B Stock of record
(hereinafter called a "Class B Holder") may transfer, and the Corporation
shall not register the transfer of, such shares of Class B Stock, whether
by sale, assignment, gift, bequest, appointment or otherwise, except to a
"Permitted Transferee." A "Permitted Transferee" shall mean, with respect
to each person from time to time shown as the record holder of shares of
Class B Stock:
(a) In the case of a Class B Holder who is a natural
person,
(1) The spouse of such Class B Holder, any lineal
descendant of a great grandparent of either the Class B Holder or the
spouse of the Class B Holder, including adopted children;
(2) The trustee of a trust (whether testamentary,
intervivos or a voting trust) principally for the benefit of such Class B
Holder and/or one or more of his Permitted Transferees described in each
subclause of this clause (a);
(3) Any organization to which contributions are
deductible for federal income, estate or gift tax purposes or any
split-interest trust described in Section 4947 of the Internal Revenue
Code of 1986, as it may from time to time be amended (hereinafter called a
"Charitable Organization");
(4) A corporation, of which outstanding capital stock
entitled to a majority of the 7 votes in the election of directors is
owned beneficially solely by, or a partnership, of which a majority of the
partnership interests entitled to participate in the management of the
partnership is owned beneficially solely by, the Class B Holder and/or one
or more of his or her Permitted Transferees determined under this clause
(a), provided that if by reason of any change in the ownership of such
stock or partnership interests, such corporation or partnership would no
longer qualify as a Permitted Transferee, all shares of Class B Stock then
held by such corporation or partnership shall be converted automatically
into shares of Common Stock effective upon the date of such change in
ownership of such stock or partnership interests, and stock certificates
formerly representing such shares of Class B Stock shall thereupon and
thereafter be deemed to represent the like number of shares of Common
Stock; and
(5) The estate of such Class B Holder.
(b) In the case of a Class B Holder holding the shares
of Class B Stock in question as trustee pursuant to a trust (other than
pursuant to a trust described in clause (f) below), "Permitted Transferee"
means (1) any person transferring Class B Stock to such trust and (2) any
Permitted Transferee of any such transferor determined pursuant to clause
(a) above.
(c) In the case of a Class B Holder which is a
Charitable Organization holding record and beneficial ownership of the
shares of Class B Stock in question, "Permitted Transferee" means any
Class B Holder.
(d) In the case of a Class B Holder which is a
corporation or partnership (other than a Charitable Organization)
acquiring record and beneficial ownership of the shares of Class B Stock
in question upon its initial issuance by the Corporation, "Permitted
Transferee" means (1) a partner of such partnership or shareholder of such
corporation at the time of issuance, and (2) any Permitted Transferee
(determined pursuant to clause (a) above) of any such partner or
shareholder referred to in subclause (1) of this clause (d).
(e) In the case of a Class D Holder which is a
corporation or partnership (other than a Charitable Organization or a
corporation or partnership described in clause (d) above) holding record
and beneficial ownership of the shares of Class B Stock in question,
"Permitted Transferee" means (1) any person transferring such shares of
Class B Stock to such corporation or partnership and (2) any Permitted
Transferee of any such transferor determined under clause (a) above.
(f) In the case of a Class B Holder holding the shares
of Class B Stock in question as trustee pursuant to a trust which was
irrevocable at the time of issuance of the Class B Stock, "Permitted
Transferee" means (1) any person to whom or for whose benefit principal
may be distributed either during or at the end of the term of such trust
whether by power of appointment or otherwise and (2) any Permitted
Transferee of any such person determined pursuant to clause (a) above.
(g) In the case of a Class B Holder which is the estate
of a deceased Class B Holder or which is the estate of a bankrupt or
insolvent Class B Holder, which holds record and beneficial ownership of
the shares of Class B Stock in question, "Permitted Transferee" means a
Permitted Transferee of such deceased, bankrupt or insolvent Class B
Holder as determined pursuant to clause (a), (b), (c), (d), (e) or (f)
above, as the case may be.
(h) Any Class B Holder may transfer all or any part of
such holder's Class B Stock to any Class B Holder which, at the time of
such transfer, owns not less than 50,000 shares of Class B Stock (as
adjusted for stock splits and stock dividends); provided, however, that
such proposed transfer shall be authorized by the holders of a majority of
the outstanding shares of Common Stock of the Corporation entitled to
vote, and by the holders of a majority of the outstanding shares of Class
B Stock entitled to vote, each Class voting separately.
(ii) Notwithstanding anything to the contrary set forth
herein, any Class B Holder may pledge such holder's shares of Class B
Stock to a pledgee pursuant to a bona fide pledge of such shares as
collateral security for indebtedness due to the pledgee, provided that
such shares shall remain subject to the provisions of this Paragraph D. In
the event of foreclosure or other similar action by the pledgee, such
pledged shares of Class B Stock may (a) be transferred only to a Permitted
Transferee of the pledgor or (b) converted into shares of Common Stock and
transferred to the pledgee, as the pledgee may elect.
(iii) For purposes of this Paragraph D:
(a) The relationship of any person that is derived by or
through legal adoption shall be considered a natural one.
(b) Each joint owner of shares of Class B Stock shall be
considered a "Class B Holder" of such shares.
(c) A minor for whom shares of Class B Stock are held
pursuant to a Uniform Gifts to Minors Act or similar law shall be
considered a Class B Holder of such shares.
(d) Unless otherwise specified, the term "person" means
both natural persons and legal entities.
(e) Each reference to a corporation shall include any
successor corporation resulting from merger or consolidation; and each
reference to a partnership shall include any successor partnership
resulting from the death or withdrawal of a partner.
(iv) Any transfer of shares of Class B Stock not permitted
hereunder shall result in the conversion of the transferee's shares of
Class B Stock into shares of Common Stock, effective the date on which
certificates representing such shares are presented for transfer on the
books of the Corporation. The Corporation may, in connection with
preparing a list of shareholders entitled to vote at any meeting of
shareholders, or as a condition to the transfer or the registration of
shares of Class B Stock on the Corporation's books, require the furnishing
of such affidavits or other proof as it deems necessary to establish that
any person is the beneficial owner of shares of Class B Stock or is a
Permitted Transferee.
(v) If at any time the number of outstanding shares of Class B
Stock as reflected on the stock transfer books of the Corporation falls
below 300,000 shares, or such higher number as results from adjustments
for stock splits or stock dividends, the outstanding shares of Class B
Stock shall automatically be deemed converted into shares of Common Stock
and certificates formerly representing outstanding shares of Class B Stock
shall thereupon and thereafter represent the like number of shares of
Common Stock.
(vi) Shares of Class B Stock shall be registered in the names
of the beneficial owners thereof and not in "street" or "nominee" names.
Notwithstanding the foregoing, trusts may transfer shares into nominee
name. The Corporation shall note on the certificates for shares of Class B
Stock the restrictions on transfer and registration of transfer imposed by
this Paragraph D.
(vii) The term "beneficial ownership" and derivations thereof
shall have the same meaning given thereto under the Securities Exchange
Act of 1934, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.
E. Conversion Rights.
(i) Subject to the terms and conditions of this Paragraph E,
each share of Class B Stock shall be convertible at any time or from time
to time, at the option of the respective holder thereof, at the office of
any transfer agent for Common Stock, and at such other place or places, if
any, as the Board of Directors may designate, into one (1) fully-paid and
nonassessable share of Common Stock. In order to convert Class B Stock
into Common Stock, the holder thereof shall (a) surrender the certificate
or certificates for such Class B Stock at the office of said transfer
agent (or other place as provided above), which certificate or
certificates, if this Corporation shall so request, shall be duly endorsed
to the Corporation or in blank or accompanied by proper instruments of
transfer to the Corporation (such endorsements or instruments of transfer
to be in form satisfactory to the Corporation), and (b) give written
notice to the Corporation that such holder elects to convert said Class B
Stock, which notice shall state the name or names in which such holder
wishes the certificate or certificates for Common Stock to be issued. The
Corporation will issue and deliver at the office of said transfer agent
(or other place as provided above) to the person for whose account such
Class B Stock was so surrendered, or to his nominee or nominees, a
certificate or certificates for the number of full shares of Common Stock
to which such holder shall be entitled as soon as practicable after such
deposit of a certificate or certificates of Class B Stock, accompanied by
the requisite written notice. Such conversion shall be deemed to have been
made as of the date of such surrender of the Class B Stock to be
converted; and the persons entitled to receive the Common Stock issuable
upon conversion of such Class B Stock shall be treated for all purposes as
the record holder or holders of such Common Stock on such date.
(ii) The issuance of certificates for shares of Common Stock
upon conversion of shares of Class B Stock shall be made without charge
for any stamp or other similar tax in respect of such issuance. However,
if any such certificate is to be issued in a name other than that of the
holder of the share or shares of Class B Stock converted, the person or
persons requesting the issuance thereof shall pay to the Corporation the
amount of any tax which may be payable in respect of any transfer involved
in such issuance or shall establish to the satisfaction of the Corporation
that such tax has been paid or is not required to be paid.
(iii) The Corporation covenants that it will at all times
reserve and keep available, solely for the purpose of issue upon
conversion of the outstanding shares of Class B Stock, such number of
shares of Common Stock as shall be issuable upon the conversion of all
such outstanding shares.
Section 3. Preferred Stock.
A. The Preferred Stock may be issued in one or more series and may
be with such voting powers, full or limited, or without voting powers, and with
such designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, as
shall be fixed by the Board of Directors pursuant to authority hereby expressly
granted to it, and as shall be stated and expressed in the resolution or
resolutions providing for the issue of such stock adopted by the Board of
Directors pursuant to authority expressly vested in it by these provisions.
B. Any Preferred Stock or series thereof may be made subject to
redemption at such time or times and at such price or prices as shall be stated
and expressed in the resolution or resolutions providing for the issue of such
stock adopted by the Board of Directors as hereinabove provided.
C. The holders of Preferred Stock or of any series thereof shall be
entitled to receive dividends at such rates, on such conditions and at such
times as shall be stated and expressed in the resolution or resolutions
providing for the issue of such stock adopted by the Board of Directors as
hereinabove provided, payable in preference to, or in such relation to, the
dividends payable on any other class or classes of stock, or cumulative or
noncumulative as shall be so stated and expressed.
D. The holders of Preferred Stock or of any class or of any series
thereof, shall be entitled to such rights upon the dissolution of, or upon any
distribution of the assets of, the Corporation as shall be stated and expressed
in the resolution or resolutions providing for the issue of such stock adopted
by the Board of Directors as hereinabove provided.
E. Subject to Section 2A(iii) of this Article Four, any Preferred
Stock of any class or of any series thereof may be made convertible into, or
exchangeable for, shares of any other class or classes or of any other series of
the same or of any other class or classes of stock of the Corporation, or shares
of any class or series of stock of any other Corporation, at such price or
prices or at such rates of exchange and with such adjustments as shall be stated
and expressed or provided for the issue of such stock adopted by the Board of
Directors as hereinabove provided.
Section 4. Issuance of Common Stock, Class B Stock and Preferred
Stock. The Board of Directors of the Corporation may from time to time authorize
by resolution the issuance of any or all shares of the Common Stock, the
Preferred Stock and, subject to Section 2A(iii) of this Article Four, the Class
B Stock, herein authorized in accordance with the terms and conditions set forth
in this Amended and Restated Certificate or Incorporation for such purposes, in
such amounts, to such persons, corporations, or entities, for such
consideration, and in the case of the Preferred Stock, in one or more series,
all as the Board of Directors in its discretion may determine and without any
vote or other action by the shareholders, except as otherwise required by law.
Except for the payment of one stock dividend to holders of Common Stock within
120 days of the effective date of this amendment (which 120-day period may be
extended by the Board of Directors), at any time shares of Class B Stock are
outstanding, the Board of Directors may not issue shares of Common Stock in the
form of a distribution or distributions pursuant to a stock dividend or
split-up, division or combination of the shares of Common Stock except where
such shares are issuable both (i) only to the holders of the then outstanding
shares of Common Stock and (ii) only in conjunction with and in the same ratio
as a stock dividend or split-up, division or combination of the shares of Class
B Stock.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of the General Corporation Law of the State of
Delaware or on the application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under the provisions of Section 279 of
the General Corporation Law of the State of Delaware order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.
SEVENTH: For the management of the business and for the conduct of
the affairs of the Corporation, and in further definition, limitation and
regulation of the powers of the Corporation and of its directors and
stockholders, or any class thereof, as the case may be, it is further provided:
1. The power to make, alter, or repeal the By-Laws of the
Corporation, and to adopt any new By-Laws, except a By-Law classifying
directors for election for staggered terms, shall be vested in the Board
of Directors, provided that the Board of Directors may delegate such
power, in whole or in part, to the stockholders.
2. Whenever the Corporation shall be authorized to issue more
than one class of stock, one or more of which is denied voting power, no
outstanding share of any class of stock which is denied voting power under
the provisions of the Certificate of Incorporation shall entitle the
holder thereof to notice of, and the right to vote at any meeting of
stockholders except as the provisions of paragraph (c)(2) of section 242
of the General Corporation Law and of sections 251 and 252 of the General
Corporation Law shall otherwise require; provided, that no share of any
such class which is otherwise denied voting power shall entitle the holder
thereof to vote upon the increase or decrease in the number of authorized
shares of said class.
3. In lieu of taking any permissive or requisite action by
vote at a meeting of stockholders, any such vote and any such meeting may
be dispensed with if either all of the stockholders entitled to vote upon
the action at any such meeting shall consent in writing to any such
corporate action being taken or if less than all of the stockholders
entitled to vote upon the action at any such meeting shall consent in
writing to any such corporate action being taken; provided, that any such
action taken upon less than the unanimous written consent of all
stockholders entitled to vote upon any such action shall be by the written
consent of the stockholders holding at least the minimum percentage of the
votes required to be cast to authorize any such action under the
provisions of the General Corporation Law or under the provisions of the
Certificate of Incorporation or the By-Laws as permitted by the provisions
of the General Corporation Law; and, provided, that prompt notice of the
taking of the corporate action without a meeting by less than unanimous
consent shall be given to those stockholders who have not consented in
writing.
4. No election of directors need be by written ballot.
EIGHTH: No contract or transaction between the Corporation and one
or more of its directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in which one or
more of its directors or officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
his or their votes are counted for such purpose, if:
(a) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of Directors
or the Committee, and the Board or Committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or,
(b) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or,
(c) The contract or transaction is fair as to the Corporation as of
the time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
NINTH: Every person (and the heirs, executors and administrators of
such person) who is or was a director, officer, employee or agent of the
Corporation or of any other company, including another corporation, partnership,
joint venture, trust or other enterprise which such person serves or served as
such at the request of the Corporation shall be indemnified by the Corporation
against all judgments, payments in settlement (whether or not approved by
court), fines, penalties and other reasonable costs and expenses (including fees
and disbursements of counsel) imposed upon or incurred by such person in
connection with or resulting from any action, suit, proceeding, investigation or
claim, civil, criminal, administrative, legislative or other (including any
criminal action, suit or proceeding in which such person enters a plea of guilty
or nolo contendere or its equivalent), or any appeal relating thereto, which is
brought or threatened either by or in the right of the Corporation or such other
company (herein called a "derivative action") or by any other person,
governmental authority or instrumentality (herein called a "third-party action")
and in which such person is made a party or is otherwise involved by reason of
his being or having been such director, officer, employee or agent or by reason
of any action or omission, or alleged action or omission by such person in his
capacity as such director, officer, employee or agent if either (a) such person
is wholly successful, on the merits or otherwise, in defending such derivative
or third-party action or (b) in the judgment of a court of competent
jurisdiction or, in the absence of such a determination, in the judgment of a
majority of a quorum of the Board of Directors of the Corporation (which quorum
shall not include any director who is a party to or is otherwise involved in
such action) or, in the absence of such a disinterested quorum, in the opinion
of independent legal counsel (i) in the case of a derivative action, such person
acted in good faith in what he reasonably believed to be the best interest of
the Corporation and was not adjudged liable to the Corporation or such other
company or (ii) in the case of a third-party action, such person acted in good
faith in what he reasonably believed to be the best interest of the Corporation
or such other company, and, in addition, in any criminal action, had no
reasonable cause to believe that his action was unlawful; provided that, in the
case of a derivative action, such indemnification shall not be made in respect
of any payment to the Corporation or such other company or any stockholder
thereof in satisfaction of judgment or in settlement unless either (x) a court
of competent jurisdiction has approved such settlement, if any, and the
reimbursement of such payment or (y) if the court in which such action has been
instituted lacks jurisdiction to grant such approval or such action is settled
before the institution of judicial proceedings, in the opinion of independent
legal counsel the applicable standard of conduct specified in the preceding
sentence has been met, such action was without substantial merit, such
settlement was in the best interests of the corporation or such other company
and the reimbursement of such payment is permissible under applicable law. In
case such person is successful, on the merits or otherwise, in defending part of
such action or, in the judgment of such a court or such quorum of the Board of
Directors or in the opinion of such counsel, has met the applicable standard of
conduct specified in the preceding sentence with
respect to part of such action, he shall be indemnified by the Corporation
against the judgments, settlements, payments, fines, penalties and other costs
and expenses attributable to such part of such action.
The directors may authorize the advancement of such amounts
necessary to cover the reasonable costs and expenses incurred by any director,
officer or employee in connection with the action, suit, proceeding,
investigation or claim prior to final disposition thereof to the extent
permitted under Delaware law.
The foregoing rights of indemnification and advancement of expenses
shall be in addition to any rights to which any such director, officer,
employee, or agent may otherwise be entitled under the Certificate of
Incorporation, any agreement or vote of stockholders or at law or in equity or
otherwise.
No director shall have any personal liability to the Corporation or
its stockholders for any monetary damages for breach of fiduciary duty as a
director, except that this Article shall not eliminate or limit the liability of
each director (i) for any breach of such director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which such director derived an improper personal benefit. This Article
shall not eliminate or limit the liability of such director for any act or
omission occurring prior to the date when this Article becomes effective.
TENTH: The Corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of Article NINTH.
ELEVENTH: From time to time any of the provisions of this
Certificate of Incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said law,
and all rights at any time conferred upon the stockholders of the Corporation by
this Certificate of Incorporation are granted subject to the provisions of this
Article ELEVENTH.
CERTIFICATE OF AMENDMENT
OF
COMPOSITE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VISHAY INTERTECHNOLOGY, INC.
ADOPTED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 242 OF THE DELAWARE GENERAL CORPORATION LAW
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
Vishay Intertechnology, Inc.
2. The Composite Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended by striking out the first paragraph of Article
Fourth thereof and by substituting in lieu of said paragraph of said Article the
following new paragraph:
"FOURTH: SECTION 1. CLASSES AND NUMBER OF SHARES. The total number of
shares of all classes of stock which the Corporation shall have
authority to issue is 91,000,000 shares. The classes and the aggregate
number of shares of stock of each class which the Corporation shall
have authority to issue are as follows:
(i) 75,000,000 shares of Common Stock, $0.10 par value per share
(hereinafter the "Common Stock");
(ii) 15,000,000 shares of Class B Common Stock, $0.10 par value
per share (hereinafter the "Class B Stock"); and
(iii) 1,000,000 shares of Preferred Stock, $1.00 par value per
share, with such rights, privileges, restrictions and preferences as
the Board of Directors may authorize from time to time (hereinafter the
"Preferred Stock")."
3. The amendment of the Composite Amended and Restated Certificate of
Incorporation herein certified has been duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
Signed and attested to on May 22, 1997.
/s/ Richard N. Grubb
--------------------------------
Name: Richard N. Grubb
Title: Executive Vice President,
Treasurer and Chief Financial
Officer
Attest:
/s/ William J. Spires
- -------------------------------
Name: William J. Spires
Title: Vice President and Secretary
CERTIFICATE OF AMENDMENT
OF THE
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VISHAY INTERTECHNOLOGY, INC.
Adopted in accordance with the provisions of
Section 242 of the Delaware General Corporation Law
It is hereby certified that:
1. The name of the corporation is Vishay Intertechnology, Inc.
(hereinafter, the "Corporation").
2. The Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended by striking out the first paragraph of Article
Fourth thereof and substituting in lieu of said paragraph of said Article the
following new paragraph:
"FOURTH: Section 1. Classes and Number of Shares. The total number
of shares of all classes of stock which the Corporation shall have authority to
issue is 341,000,000 shares. The classes and the aggregate number of shares of
stock of each class which the Corporation shall have authority to issue are as
follows:
(i) 300,000,000 shares of Common Stock, $0.10 par value per share
(hereinafter the "Common Stock");
(ii) 40,000,000 shares of Class B Common Stock, $0.10 par value per
share (hereinafter the "Class B Stock"); and
(iii) 1,000,000 shares of Preferred Stock, $1.00 par value per
share, with such rights, privileges, restrictions and preferences as the
Board of Directors may authorize from time to time (hereinafter the
"Preferred Stock")."
3. The Amendment of the Amended and Restated Certificate of Incorporation
of the Corporation herein certified has been duly adopted in accordance with
Section 242 of the Delaware General Corporation Law.
Signed and attested to on November 2, 2001
/s/ Richard N. Grubb
--------------------------------------
Name: Richard N. Grubb
Title: Executive Vice President,
Treasurer and Chief Financial Officer
Attest:
/s/ William J. Spires
- -------------------------------------
Name: William J. Spires
Title: Vice President and Secretary
CERTIFICATE OF AMENDMENT
OF THE
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VISHAY INTERTECHNOLOGY, INC.
Adopted in accordance with the provisions of
Section 242 of the Delaware General Corporation Law
It is hereby certified that:
1. The name of the corporation is Vishay Intertechnology, Inc.
(hereinafter, the "Corporation").
2. The Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended by adding to Article VII the following new
section:
"5. Directors shall be elected annually, and except as set forth in
this paragraph in connection with the initial classification of directors,
shall serve for terms of three years. The directors shall be divided into
three classes, as nearly equal in number as possible, with the term of
office of the first class ("Class I") to expire at the 2004 annual meeting
of stockholders, the term of office of the second class ("Class II") to
expire at the 2005 annual meeting and the term of office of the third
class ("Class III") to expire at the 2006 annual meeting. At each annual
meeting of stockholders following such initial classification and
election, directors elected to succeed those directors whose terms expire
shall be elected for a three-year term of office and until the election
and qualification of their respective successors in office."
3. The Amendment of the Amended and Restated Certificate of
Incorporation of the Corporation herein certified has been duly adopted in
accordance with Section 242 of the Delaware General Corporation Law.
Signed and attested to on July 29, 2003
- -------------------------------
Name: Richard N. Grubb
Title: Executive Vice President, Treasurer and Chief Financial Officer
Attest:
- -------------------------------
Name: William Clancy
Title: Assistant Secretary
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 2 to Registration Statement (Form S-3 No. 333-102507) and related
Prospectus of Vishay Intertechnology, Inc. for the registration of Class A
Warrants to purchase 7,000,000 shares of its common stock, Class B Warrants to
purchase 1,823,529 shares of its common stock, 6,176,467 shares of its common
stock issuable upon exchange of $105,000,000 Floating Rate Unsecured Loan Notes
due 2102, and 8,823,529 shares of its common stock issuable upon exercise of
Class A Warrants and Class B Warrants and to the incorporation by reference
therein of our report dated February 6, 2003, with respect to the consolidated
financial statements of Vishay Intertechnology, Inc. included in its Annual
Report (Form 10-K/A) for the year ended December 31, 2002, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
October 1, 2003