SEC Filing | Vishay Intertechnology, Inc.

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ COMMISSION FILE NUMBER 1-7416 VISHAY INTERTECHNOLOGY, INC. (Exact name of registrant as specified in its charter) DELAWARE 38-1686453 - --------------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 63 LINCOLN HIGHWAY MALVERN, PENNSYLVANIA 19355 - --------------------------------------- -------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (610) 644-1300 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [x] NO [ ] As of August 11, 1997 registrant had 56,451,517 shares of its Common Stock and 7,931,898 shares of its Class B Common Stock outstanding.

VISHAY INTERTECHNOLOGY, INC. FORM 10-Q JUNE 30, 1997 CONTENTS Page No. -------- PART I. FINANCIAL INFORMATION Item 1. Consolidated Condensed Balance Sheets - 3-4 June 30, 1997 and December 31, 1996 Consolidated Condensed Statements of 5 Operations - Three Months Ended June 30, 1997 and 1996 Consolidated Condensed Statements of 6 Operations - Six Months Ended June 30, 1997 and 1996 Consolidated Condensed Statements of 7 Cash Flows - Six Months Ended June 30, 1997 and 1996 Notes to Consolidated Condensed 8-9 Financial Statements Item 2. Management's Discussion and Analysis 10-14 of Financial Condition and Results of Operations PART II. OTHER INFORMATION 15-16 -2-

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Balance Sheets (Unaudited - In thousands) June 30, December 31, ASSETS 1997 1996 ----------- ------------ CURRENT ASSETS Cash and cash equivalents $37,192 $20,945 Accounts receivable 174,613 163,164 Inventories: Finished goods 158,719 182,722 Work in process 77,637 73,606 Raw materials 90,078 100,418 Prepaid expenses and other current assets 82,421 82,310 ----------- ----------- TOTAL CURRENT ASSETS 620,660 623,165 PROPERTY AND EQUIPMENT - AT COST Land 40,260 43,705 Buildings and improvements 218,136 222,743 Machinery and equipment 696,636 695,084 Construction in progress 52,329 57,891 Allowance for depreciation (332,694) (308,761) ----------- ----------- 674,667 710,662 GOODWILL 190,982 201,574 OTHER ASSETS 28,578 20,646 ----------- ----------- $1,514,887 $1,556,047 =========== =========== -3-

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Balance Sheets (Unaudited - In thousands) June 30, December 31, LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1996 -------- --------- CURRENT LIABILITIES Notes payable to banks $35,872 $31,212 Trade accounts payable 36,738 33,930 Payroll and related expenses 43,905 35,973 Other accrued expenses 45,785 55,381 Income taxes 16,774 7,076 Current portion of long-term debt 26,597 25,394 ----------- ----------- TOTAL CURRENT LIABILITIES 205,671 188,966 LONG-TERM DEBT 175,227 229,885 DEFERRED INCOME TAXES 33,435 33,113 DEFERRED INCOME 60,869 58,570 OTHER LIABILITIES 28,039 30,534 ACCRUED RETIREMENT COSTS 63,096 69,749 STOCKHOLDERS' EQUITY Common stock 5,645 5,373 Class B common stock 793 756 Capital in excess of par value 911,837 825,949 Retained earnings 61,892 107,762 Foreign currency translation adjustment (27,431) 9,106 Unearned compensation (753) (370) Pension adjustment (3,433) (3,346) ----------- ----------- 948,550 945,230 ----------- ----------- $1,514,887 $1,556,047 =========== =========== See notes to consolidated condensed financial statements. -4-

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Operations (Unaudited - In thousands except earnings per share) Three Months Ended June 30, 1997 1996 --------- --------- Net sales $272,661 $273,502 Costs of products sold 207,031 201,638 --------- --------- GROSS PROFIT 65,630 71,864 Selling, general, and administrative expenses 33,698 38,466 Restructuring expenses 0 24,280 Amortization of goodwill 1,499 1,630 --------- --------- OPERATING INCOME 30,433 7,488 Other income (expense): Interest expense (3,564) (4,569) Other 837 1,022 --------- --------- (2,727) (3,547) --------- --------- EARNINGS BEFORE INCOME TAXES 27,706 3,941 Income taxes 7,758 158 --------- --------- NET EARNINGS $19,948 $3,783 ========= ========= Net earnings per share $0.31 $0.06 ========= ========= Weighted average shares outstanding 64,369 64,368 See notes to consolidated condensed financial statements. -5-

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Operations (Unaudited - In thousands except earnings per share) Six Months Ended June 30, 1997 1996 ----------------------- Net sales $545,923 $584,162 Costs of products sold 414,689 427,217 --------- --------- GROSS PROFIT 131,234 156,945 Selling, general, and administrative expenses 67,617 78,841 Restructuring expenses 0 24,280 Amortization of goodwill 3,016 3,260 --------- --------- OPERATING INCOME 60,601 50,564 Other income (expense): Interest expense (7,265) (8,862) Other 1,384 863 --------- --------- (5,881) (7,999) --------- --------- EARNINGS BEFORE INCOME TAXES 54,720 42,565 Income taxes 15,114 10,741 --------- --------- NET EARNINGS $39,606 $31,824 ========= ========= Net earnings per share $0.62 $0.49 ========= ========= Weighted average shares outstanding 64,363 64,358 See notes to consolidated condensed financial statements. -6-

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows (Unaudited - In thousands) Six Months Ended June 30, 1997 1996 ------- ------- OPERATING ACTIVITIES Net earnings $39,606 $31,824 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 39,566 38,486 Other 2,555 19,227 Changes in operating assets and liabilities 10,457 (40,867) -------- -------- NET CASH PROVIDED BY OPERATING ACTIVITIES 92,184 48,670 INVESTING ACTIVITIES Purchases of property and equipment-net (34,812) (77,546) -------- -------- NET CASH USED IN INVESTING ACTIVITIES (34,812) (77,546) FINANCING ACTIVITIES Net (payments) proceeds on revolving credit lines (38,179) 82,568 Proceeds from long-term borrowings 241 3,375 Payments on long-term borrowings (8,043) (56,236) Net proceeds on short-term borrowings 8,072 14,176 -------- -------- NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES (37,909) 43,883 Effect of exchange rate changes on cash (3,216) (877) -------- -------- INCREASE IN CASH AND CASH EQUIVALENTS 16,247 14,130 Cash and cash equivalents at beginning of period 20,945 19,584 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $37,192 $33,714 ======== ======== See notes to consolidated condensed financial statements. -7-

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1997 Note 1: Basis of Presentation The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for presentation of financial position, results of operations, and cash flows required by generally accepted accounting principles for complete financial statements. The information furnished reflects all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair summary of the financial position, results of operations and cash flows for the interim periods presented. The financial statements should be read in conjunction with the financial statements and notes thereto filed with Form 10-K for the year ended December 31, 1996. Note 2: Earnings Per Share Earnings per share amounts for all periods reflect a 5% stock dividend paid on June 9, 1997. Note 3: Acquisitions On July 17, 1997, the Company consummated its acquisition of 65% of Lite-On Power Semiconductor Corporation, a Republic of China (Taiwan) company ("LPSC"), and a member of Taiwan's Lite-On Group of companies, for a net purchase price of US$130 million. LPSC produces diodes, primarily in the Far East, with manufacturing facilities in Taipei, Taiwan; Shanghai, China; and Lee's Summit, Missouri. LPSC also owns approximately 40.2% of Diodes, Inc. (AMEX: DIO), located in Westlake, California. Diodes is a U.S. public company traded on the American Stock Exchange. Diodes are discrete semiconductor components used to convert electrical currents from AC to DC and are used in all electronic equipment that requires such conversion. Pursuant to the Stock Purchase Agreement, dated April 25, 1997, among LPSC, Silitek Corporation ("Silitek"), Lite-On Technology Corporation, Dyna Investment Co., Ltd., Lite-On Inc. and other shareholders as Sellers, and the Company, as Purchaser (the "Stock Purchase Agreement"), the Company, through two Singapore entities, acquired approximately 100% of the issued and outstanding shares of capital stock of LPSC for cash consideration of US$200 million. -8-

The purchase was made by a Singapore company (the "Joint Venture Company"), whose capital stock at the time of the acquisition was 50% owned directly by the Company, and 50% owned by another Singapore company (the "Holding Company"), which at the time was a wholly owned subsidiary of the Company. The purchase price was funded by current availability under the Company's existing credit facilities, which were amended as of June 30, 1997 to reflect a number of technical modifications necessary to permit the LPSC acquisition and the Joint Venture described below. Concurrently with the consummation of the acquisition, pursuant to the terms of the Joint Venture Agreement, dated April 25, 1997, between the Company and a company formed by Silitek and certain other shareholders of LPSC, Lite-On JV Corporation ("JV"), which agreement was amended as of July 17, 1997 (as amended, the "Joint Venture Agreement"), JV purchased from the Company 35% of its interest in the Holding Company and 17.5% of its interest in the Joint Venture Company for consideration of $70 million. In connection therewith, JV received stock appreciation rights ("SARs") in the Company, which represent the right to receive the increase in value on the equivalent of 1,625,000 shares of the Company's stock above $23 per share. Subject to certain annual and other adjustments, the Company may redeem the SARs if the Company's stock trades above $43 per share. At that price, the SAR's would entitle JV to 755,813 shares of the Company's common stock. The Joint Venture Agreement also defines the terms of the management of LPSC and its subsidiaries and the agreement between the Company and JV to market the Company's products in Asia and LPSC's products throughout the world. The foregoing summaries of the Stock Purchase Agreement and the Joint Venture Agreement (including the amendment thereto) are qualified in their entirety by reference to the text of each of such agreements, which are filed as exhibits to the Company's report on Schedule 13D, filed on July 25, 1997, which agreements are incorporated herein by reference. The summary of the amendment to the Company's credit facilities is qualified in its entirety by reference to the text of such amendment, which is filed as an exhibit hereto and which is incorporated herein by reference. -9-

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Income statement captions as a percentage of sales and the effective tax rates were as follows: Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 ---- ---- ---- ---- Costs of products sold 75.9% 73.7% 76.0% 73.1% Gross profit 24.1 26.3 24.0 26.9 Selling, general and administrative expenses 12.4 14.1 12.4 13.5 Operating income 11.2 2.7 11.1 8.7 Earnings before income taxes 10.2 1.4 10.0 7.3 Effective tax rate 28.0 4.0 27.6 25.2 Net earnings 7.3 1.4 7.3 5.4 Net sales for the quarter and six months ended June 30, 1997 decreased $841,000 or .3% and $38,239,000 or 6.5%, respectively, from the comparable periods of the prior year. The decrease in net sales is related to a number of factors including price reductions in the Company's "commodity" products (tantalum, ceramic and resistor chips). As a result of competitive pressures, prices of these products have been reduced between 10% and 20% in the past year. In addition, the strengthening of the U.S. dollar against foreign currencies for the quarter and six months ended June 30, 1997 in comparison to the prior year's periods, resulted in decreases in reported sales of $12,005,000 and $24,286,000, respectively. Costs of products sold for the quarter and six months ended June 30, 1997 were 75.9% and 76.0% of net sales, respectively, as compared to 73.7% and 73.1%, respectively, for the comparable prior year periods. Gross profits for the quarter and six months ended June 30, 1997 were negatively affected by a difficult pricing environment. Israeli government grants, recorded as a reduction of costs of products sold, were $2,801,000 and $5,425,000 for the quarter and six months ended June 30, 1997, respectively, as compared to $2,061,000 and $4,201,000 for the comparable prior year periods. Future grants and other incentive programs offered to the Company by the Israeli government will likely depend on the Company's continuing to increase capital investment and the number of the Company's employees in Israel. Deferred income at June 30, 1997 -10-

relating to Israeli government grants was $60,869,000 as compared to $58,570,000 at December 31, 1996. Selling, general, and administrative expenses for the quarter and six months ended June 30, 1997 were 12.4% of net sales, as compared to 14.1% and 13.5%, respectively, for the comparable prior year periods. Selling, general and administrative expenses decreased by $4,768,000 and $11,224,000, respectively, as compared to the prior year periods, as a result of the cost reduction program instituted in 1996. The Company recorded a pretax restructuring charge of $24,280,000 ($16,000,000 after tax) in the quarter ended June 30, 1996 in connection with a reduction of approximately 1,300 employees in the Company's worldwide workforce. The Company also closed or downsized several facilities in North America and Europe. Interest costs decreased by $1,005,000 and $1,597,000 for the quarter and six months ended June 30, 1997, respectively, from the comparable prior year periods primarily as a result of reductions of bank indebtedness using cash generated from operating activities. The effective tax rate for the six months ended June 30, 1997 was 27.6% as compared to 25.2% for the comparable prior year period. The effective tax rate for calendar year 1996 was 25.2%. The lower tax rate for the quarter ended June 30, 1996 was due primarily to the restructuring charges recorded in the higher tax rate countries, where the Company conducts its business. The continuing effect of low tax rates in Israel (as compared to the statutory rate in the United States) has been to increase net earnings by $2,931,000 and $4,165,000 for the quarters ended June 30, 1997 and 1996, respectively, and $4,451,000 and $8,538,000 for the six month periods ended June 30, 1997 and 1996, respectively. The more favorable Israeli tax rates are applied to specific approved projects and normally continue to be available for a period of ten years. Financial Condition Cash flows from operations were $92,184,000 for the six months ended June 30, 1997 compared to $48,670,000 for the prior year's period. The increase in cash flows from operations is primarily due to a decrease in inventory for the six months ended June 30, 1997 as compared to an increase in inventory for the six months ended June 30, 1996. Net purchases of property and equipment for six months ended June 30, 1997 were $34,812,000 compared to $77,546,000 in the prior year's period. This decrease reflects the fact that the Company has substantially completed its current restructuring/expansion program. Net cash used by financing -11-

activities of $37,909,000 for the six months ended June 30, 1997 includes $45,981,000 used to pay down bank indebtedness. The Company incurred a pretax restructuring charge of $38,030,000 for the year ended December 31, 1996. Approximately $28,953,000 of these charges relate to employee termination costs covering approximately 2,600 technical, production, administrative and support employees located in the United States, Canada, France and Germany. As of June 30, 1997, approximately 2,199 employees have been terminated and $19,585,000 of the termination costs have been paid. The restructuring plan is expected to be completed by the end of 1997. The Company's financial condition at June 30, 1997 is strong, with a current ratio of 3.02 to 1. The Company's ratio of long-term debt (less current portion) to stockholders' equity was .18 to 1 at June 30, 1997 and .24 to 1 at December 31, 1996. As discussed in Note 3 to the financial statements, the Company financed the cash portion ($130 million) of the Lite-On acquisition from current availability under the Company's credit facilities. Management believes that available sources of credit, together with cash expected to be generated from operations, will be sufficient to satisfy the Company's anticipated financing needs for working capital and capital expenditures during the next twelve months. Inflation Normally, inflation does not have a significant impact on the Company's operations. The Company's products are not generally sold on long-term contracts. Consequently, selling prices, to the extent permitted by competition, can be adjusted to reflect cost increases caused by inflation. Safe Harbor Statement From time to time, information provided by the Company, including but not limited to statements in this report, or other statements made by or on behalf of the Company, may contain "forward-looking" information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements involve a number of risks and uncertainties. The Company's actual results could differ materially from those discussed in the forward-looking statements. The cautionary statements set forth below identify important factors that could cause actual results to differ materially from those in any forward-looking statements made by or on behalf of the Company. o The Company offers a broad variety of products and services to its customers. Changes in demand for, or in the mix of, products and services comprising revenues could cause actual operating results to vary from those expected. o The Company's future operating results are dependent, in part, on its ability to develop, produce and market new and innovative products, to convert existing products to surface mount devices and to customize certain products to meet customer requirements. There are numerous risks inherent in this complex process, including rapid technological changes and the need for the Company to timely bring to market new products and applications to meet customers' changing needs. o The Company operates in a highly competitive environment, which includes significant competitive pricing pressures and intense competition for entry into new markets. o A slowdown in demand for passive electronic components or recessionary trends in the global economy in general or in specific countries or regions where the Company sells the bulk of its products, such as the U.S., Germany, France or the Pacific Rim, could adversely impact the Company's results of operations. o Much of the orders in the Company's backlog may be canceled by its customers without penalty. Customers may on occasion double and triple order components from multiple sources to insure timely delivery when backlog is particularly long. The Company's results of operations may be adversely impacted if customers were to cancel a material portion of such orders. -12-

o Approximately 50% of the Company's revenues are derived from operations and sales outside the United States. As a result, currency exchange rate fluctuations, inflation, changes in monetary policy and tariffs, potential changes in laws and regulations affecting the Company's business in foreign jurisdictions, trade restrictions or prohibitions, intergovernmental disputes, increased labor costs and reduction or cancellation of government grants, tax benefits or other incentives could impact the Company's results of operations. o Specifically, as a result of the increased production by the Company's operations in Israel over the past several years, the low tax rates in Israel (as compared to the statutory rates in the U.S.) have had the effect of increasing the Company's net earnings. In addition, the Company takes advantage of certain incentive programs in Israel in the form of grants designed to increase employment in Israel. Any significant increase in the Israeli tax rates or reduction or elimination of any of the Israeli grant programs could have an adverse impact on the Company's results of operations. o The Company may experience underutilization of certain plants and factories in high labor cost regions and capacity constraints in plants and factories located in low labor cost regions, resulting initially in production inefficiencies and higher costs. Such costs include those associated 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 start of production in new plants and expansions in lower labor cost regions. Moreover, capacity constraints may limit the Company's ability to continue to meet demand for any of the Company's products. -13-

o When the Company restructures its operations in response to changing economic conditions, particularly in Europe, labor unrest or strikes may occur, which could have an adverse effect on the Company. o The Company's results of operations may be adversely impacted by (i) difficulties in obtaining raw materials, supplies, power, natural resources and any other items needed for the production of the Company's products; (ii) the effects of quality deviations in raw materials, particularly tantalum powder, palladium and ceramic dielectric materials; and (iii) the effects of significant price increases for tantalum or palladium, or an inability to obtain adequate supplies of tantalum or palladium from the limited number of suppliers. o The Company's historic growth in revenues and net earnings have resulted in large part from its strategy to expand through acquisitions. However, there is no assurance that the Company will find or consummate transactions with suitable acquisition candidates in the future. o The Company's strategy also focuses on the reduction of selling, general and administrative expenses through the integration or elimination of redundant sales offices and administrative functions at acquired companies and achievement of significant production cost savings through the transfer and expansion of manufacturing operations to lower cost regions such as Israel, Mexico, Portugal and the Czech Republic. The Company's inability to achieve any of these goals could have an adverse effect on the Company's results of operations. o The Company may be adversely affected by the costs and other effects associated with (i) legal and administrative cases and proceedings (whether civil, such as environmental and product-related, or criminal); (ii) settlements, investigations, claims, and changes in those items; (iii) developments or assertions by or against the Company relating to intellectual property rights and intellectual property licenses; and (iv) adoption of new, or changes in, accounting policies and practices and the application of such policies and practices. o The Company's results of operations may also be affected by (i) changes within the Company's organization, particularly at the executive officer level, or in compensation and benefit plans; and (ii) the amount, type and cost of the financing which the Company maintains, and any changes to the financing. o The inherent risk of environmental liability and remediation costs associated with the Company's manufacturing operations may result in large and unforseen liabilities. o The Company's operations may be adversely impacted by (i) the effects of war or severe weather or other acts of God on the Company's operations, including disruptions at manufacturing facilities; (ii) the effects of a disruption in the Company's computerized ordering systems; and (iii) the effects of a disruption in the Company's communications systems. -14-

VISHAY INTERTECHNOLOGY, INC. PART II - OTHER INFORMATION Item 1. Legal Proceedings Not applicable Item 2. Changes in Securities Not applicable Item 3. Defaults Upon Senior Securities Not applicable Item 4. Submission of Matters to a Vote of Security Holders (a) The Company held its Annual Meeting of Stockholders on May 19, 1997. (b) Proxies for the meeting were solicited pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended. There was no solicitation in opposition to management's nominees for the directors as listed in the definitive proxy statement of the Company dated April 18, 1997, and all such nominees were elected. (c) Briefly described below is each matter voted upon at the Annual Meeting of Stockholders. (i) Election of the following individuals to hold office as Directors of the Company until the next Annual Meeting of Stockholders: Total Class A Common Stock voted was 42,279,706. Broker For Against Abstain Non-Votes --- ------- ------- --------- Felix Zandman 38,719,943 3,559,763 0 0 Donald G. Alfson 38,754,312 3,525,394 0 0 Avi D. Eden 38,754,371 3,525,335 0 0 Robert A. Freece 38,754,126 3,525,580 0 0 Richard N. Grubb 38,757,381 3,522,325 0 0 Eli Hurvitz 38,588,788 3,690,918 0 0 Gerald Paul 38,755,571 3,524,135 0 0 Edward Shils 38,743,009 3,536,697 0 0 Luella B. Slaner 38,743,617 3,536,089 0 0 Mark I. Solomon 38,757,902 3,521,804 0 0 Jean-Claude Tine 38,742,890 3,536,816 0 0 Total Class B Common Stock voted was 7,518,487 in favor, 0 against, 0 abstained, and 0 broker non-votes. (ii) Approval of an amendment to the Company's Certificate of Incorporation to increase the number of shares of common stock which the Company is authorized to issue from 65,000,000 shares to 75,000,000 shares. Total Class A Common Stock voted was 41,341,673 in favor, 770,606 -15-

against, 167,427 abstained, and 0 broker non-votes. Total Class B Common Stock voted was 7,518,487 in favor, 0 against, 0 abstained, and 0 broker non-votes. (iii) Ratification of the appointment of Ernst & Young LLP, independent certified public accountants, to audit the books and accounts of the Company for the calendar year ending December 31, 1997. Total Class A Common Stock voted was 42,026,010 in favor, 145,388 against, 108,308 abstained, and 0 broker non-votes. Total Class B Common Stock voted was 7,518,487 in favor, 0 against, 0 abstained, and 0 broker non-votes. Item 5. Other Information Not applicable Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Number Description of Exhibit - ------ ---------------------- 3.1 -- Certificate of Amendment of Composite Amended and Restated Certificate of Incorporation of Vishay Intertechnology, Inc (the "Corporation").* 4.1 -- Stock Purchase Agreement among LPSC, Silitek Corporation, Lite-On Technology Corporation, Dyna Investment Co., Ltd., Lite-On Inc. and other shareholders as Sellers and the Corporation as Purchaser, incorporated by reference to Exhibit A to the Corporation's Schedule 13D filed on July 25, 1997. 10.1 -- Joint Venture Agreement between the Corporation and Lite-On JV Corporation (the "Joint Venture Agreement"), incorporated by reference to Exhibit B to the Corporation's Schedule 13D filed on July 25, 1997. 10.2 -- Amendment to the Joint Venture Agreement, incorporated by reference to Exhibit C to the Corporation's Schedule 13D filed on July 25, 1997. 10.3 -- Third Amendment to Vishay Loan Agreement, dated as of June 30, 1997.* 27 -- Financial Data Schedule.* (b) Reports on Form 8-K Not applicable - ---------- *Filed herewith. -16-

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VISHAY INTERTECHNOLOGY, INC. /s/ Richard N. Grubb ----------------------- Richard N. Grubb Executive Vice President, Treasurer (Duly Authorized and Chief Financial Officer) Date: August 12, 1997 -17-

EXHIBIT INDEX Exhibit Number Description of Exhibit - ------ ---------------------- 3.1 -- Certificate of Amendment of Composite Amended and Restated Certificate of Incorporation of Vishay Intertechnology, Inc (the "Corporation").* 4.1 -- Stock Purchase Agreement among LPSC, Silitek Corporation, Lite-On Technology Corporation, Dyna Investment Co., Ltd., Lite-On Inc. and other shareholders as Sellers and the Corporation as Purchaser, incorporated by reference to Exhibit A to the Corporation's Schedule 13D filed on July 25, 1997. 10.1 -- Joint Venture Agreement between the Corporation and Lite-On JV Corporation (the "Joint Venture Agreement"), incorporated by reference to Exhibit B to the Corporation's Schedule 13D filed on July 25, 1997. 10.2 -- Amendment to the Joint Venture Agreement, incorporated by reference to Exhibit C to the Corporation's Schedule 13D filed on July 25, 1997. 10.3 -- Third Amendment to Vishay Loan Agreement, dated as of June 30, 1997.* 27 -- Financial Data Schedule.* - ---------- *Filed herewith.

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

EXECUTION COPY - -------------------------------------------------------------------------------- THIRD AMENDMENT TO VISHAY LOAN AGREEMENT DATED AS OF JUNE 30, 1997 COMERICA BANK, AS AGENT NATIONSBANK OF NORTH CAROLINA, N.A., AS CO-AGENT BERLINER HANDELS-UND FRANKFURTER BANK, AS LEAD MANAGER ================================================================================

THIRD AMENDMENT THIS THIRD AMENDMENT ("Third Amendment") is made as of this 30th day of June, 1997 by and among Vishay Intertechnology, Inc., a Delaware corporation ("Company"), Comerica Bank, successor by merger to Manufacturers Bank, N.A., formerly known as Manufacturers National Bank of Detroit ("Comerica"), the banks signatory hereto (individually, a "Bank" and collectively, "Banks"), and Comerica Bank, as agent for the Banks (in such capacity, "Agent"). RECITALS: A. Company, Agent and the Banks entered into that certain Amended and Restated Vishay Intertechnology, Inc. $302,500,000 Revolving Credit and Term Loan Agreement dated as of July 18, 1994 (as amended by that certain First Amendment dated as of June 27, 1995 and that certain Second Amendment dated as of March 14, 1996, the "Vishay Loan Agreement") under which the Banks renewed and extended (or committed to extend) credit to the Company and the Permitted Borrowers, as set forth therein. B. At the Company's request, Agent and the Banks have agreed with the Company and the Permitted Borrowers to make certain amendments to the terms and conditions of the Vishay Loan Agreement, but only on the terms and conditions set forth in this Third Amendment. NOW, THEREFORE, Company, the Permitted Borrowers, Agent and the Banks agree: 1. Section 1 of the Vishay Loan Agreement is amended as follows: (a) Section 1.67 (the definition of "Fixed Charge Coverage Ratio") is amended and restated in its entirety as follows: "1.67 'Fixed Charge Coverage Ratio' shall mean a ratio, (i) the numerator of which shall be equal to the Operating Income of the Company plus depreciation and amortization, each for the preceding 12-month period ending on the date of determination (and determined in accordance with GAAP), minus Capital Expenditures of the Company during such 12-month period and (ii) the denominator of which shall be the Interest Expense of the Company for such 12-month period, in each case determined in accordance with GAAP." (b) Section 1.79 (the definition of "Intercompany Loan") and Section 1.80 (the definition of "Intercompany Loans, 1

Advances or Investments") are amended to replace each reference to the words "100% Subsidiary" contained therein with the words "any Subsidiary or Joint Venture, more than 50% of the share capital of which is owned, directly or indirectly, by the Company". (c) New Sections 1.86A, 1.86B and 1.86C (defining "Lite-On Joint Venture Agreement", "Lite-On Joint Venture Documents" and "LPSC") are added, immediately after Section 1.86, as follows: "1.86A 'Lite-On Joint Venture Agreement' shall mean that certain Joint Venture Agreement dated April 25, 1997 by and between the Company and Lite-On [JV Co.], a company formed under the laws of the Republic of China, relating to the acquisition by the Company of LPSC, as amended (subject to the terms hereof), from time to time. "1.86B 'Lite-On Documents' shall mean the Lite-On Joint Venture Agreement, that certain Stock Purchase Agreement dated April 25, 1997 by and among the Company and the shareholders of LPSC, and that certain Stock Appreciation Right Agreement dated as of ____________, 1997 by and between the Company and Lite-On [JV CO.], each as amended (subject to the terms hereof) from time to time. "1.86C 'LPSC' shall mean Lite-On Power Semiconductor Corporation, a company formed under the laws of the Republic of China." (d) Section 1.108 (the definition of "Permitted Transfer") is amended to replace the word "and" in the eighteenth line thereof (immediately preceding clause (iv) of said Section) with a comma and to add a new clause (v) beginning in the twenty-fifth line thereof (immediately preceding the proviso), as follows: "and (v) the transfer to Lite-On [JV Co.], of up to a 35% interest in the joint venture company to be established under Section 2.1 of the Lite-On Joint Venture Agreement, for the price and on the other terms and conditions set forth therein and in the other Lite-On Documents;" (e) Section 1.153 is amended to add, following the words "joint stock company," (in the second line thereof), the words "limited liability company, partnership". 2. Section 7 of the Vishay Loan Agreement is amended as follows: (a) Section 7.4 is amended and restated in its entirety, as follows: 2

"7.4 Tangible Net Worth. Maintain, and cause its Subsidiaries to maintain, Tangible Net Worth which on a Consolidated basis will at no time be less than Five Hundred Million Dollars ($500,000,000), plus the sum of the Net Income Adjustment and the Equity Offering Adjustment." (b) Sections 7.5A and 7.5B are amended and restated in their entirety, as follows: "7.5 Leverage Ratio. Maintain, and cause its Subsidiaries to maintain, a Leverage Ratio which on a Consolidated basis will at no time exceed 3.25 to 1.0." (c) Section 7.6 is amended and restated in its entirety, as follows: "7.6 Fixed Charge Coverage Ratio. Maintain, and cause its Subsidiaries to maintain, a Fixed Charge Coverage Ratio which on a Consolidated basis will at no time be less than 2.0 to 1.0." 3. Section 8 of the Vishay Loan Agreement is amended, as follows: (a) Section 8.2 is amended to delete from the second line thereof, the word "acquisition,". (b) Section 8.4(b) is amended to add, following the word "excluding", in the second line thereof, the words "indebtedness to". (c) Section 8.6 is amended to redesignate existing subparagraphs (b) and (c) as subparagraphs (c) and (d), respectively, and to add a new subparagraph (b) to said Section 8.6, as follows: "(b) Cash dividends by any non-100% Subsidiary or any Joint Venture, provided that such dividends are paid to each holder of share capital therein (including Company or any of its other Subsidiaries) on a pro rata basis (based on the relative amounts of share capital held by each such holder) and provided further that such dividends are paid to the Company or its other Subsidiaries on substantially the same (or better) terms as (and contemporaneously with) any dividends paid to Persons other than the Company and its Subsidiaries." 3

(d) Section 8.7(d) is amended and restated in its entirety, as follows: "(d) Intercompany Loans, Advances or Investments without regard to any repayment of such loans, advances or investments (other than the repayment or recovery of capital or principal), provided that both before and after giving effect to any such loans, advances or investments, no Default or Event of Default has occurred and is continuing under this Agreement." (e) Section 8.7(e) is amended and restated in its entirety, as follows: "(e) loans, advances or investments (without regard to any repayment of such loans, advances or investments, other than the repayment of capital or principal) to any Joint Venture or Subsidiary, including without limitation guaranties by the Company or any Subsidiary (valued on the basis of the aggregate amount of indebtedness covered by a guaranty) of third-party indebtedness of any such Joint Venture or Subsidiary, which loans, advances or investments are not otherwise permitted under this Section 8.7, in an aggregate amount at any time outstanding not to exceed five percent (5%) of Tangible Net Worth;" (f) Section 8.12 is amended and restated in its entirety, as follows: "8.12 Amendment of Stock Purchase Agreement or Lite-On Documents. Amend, modify or otherwise alter (or suffer to be amended, modified or altered) any of the material terms and conditions of the Stock Purchase Agreement or the Lite-On Documents in any respect which is materially adverse to the Company, as determined by Company in its reasonable discretion, without the prior written approval of Agent and the Majority Banks; provided that promptly following any amendment to any of such documents, Company shall provide Agent with copies of such amendments, for distribution to the Banks." 4. Section 13.8(c) (establishing a 50% minimum hold requirement) is amended to delete the second proviso (set forth in the fifteenth through eighteenth lines thereof) from said Section 13.8(c) and Section 13.8(d)(ii) is amended and restated in its entirety, as follows: 4

"(ii) each assignment shall be in a minimum amount equal to the lesser of (A) a Bank's entire remaining interest under the Loan Agreements (and the Notes issued thereunder) or (B) Ten Million Dollars ($10,000,000) or, as applicable, the Alternative Currency Equivalent thereof;". 5. Company and each of the Permitted Borrowers ratify and confirm, as of the date hereof, each of the representations and warranties set forth in Sections 6.1 through 6.21, inclusive, of the Vishay Loan Agreement (as amended by this Third Amendment), and acknowledge that such representations and warranties are and shall remain continuing representations and warranties during the entire life of the Vishay Loan Agreement. 6. Except as specifically set forth above, this Third Amendment shall not be deemed to amend or alter in any respect the terms and conditions of the Vishay Loan Agreement, any of the Notes issued thereunder, or any of the other Loan Documents, or to constitute a waiver by Banks or Agent of any right or remedy under the Vishay Loan Agreement, any of the Notes issued thereunder or any of the other Loan Documents. 7. This Third Amendment shall become effective as of June 30, 1997, subject to the satisfaction by Company and each of the Permitted Borrowers of the following conditions on or before July __, 1997: (a) Agent shall have received counterpart originals of this Third Amendment duly executed and delivered by the Majority Banks, the Company and the Permitted Borrowers and in form satisfactory to Agent and the Majority Banks; and (b) Agent shall have received from Company and the Permitted Borrowers, as applicable, copies, certified by a duly authorized officer to be true and complete as of the date hereof, of records of all action taken by Company and the Permitted Borrowers, as the case may be, to authorize the execution and delivery of this Third Amendment. 8. Unless otherwise expressly defined to the contrary herein, all capitalized terms used in this Third Amendment shall have the meaning set forth in the Vishay Loan Agreement. 9. By executing this Third Amendment, each of the Permitted Borrowers consents to and acknowledges and agrees to be bound by the terms and conditions of this Third Amendment. 10. This Third Amendment may be executed in counterpart, in accordance with Section 13.10 of the Vishay Loan Agreement. * * * [SIGNATURES CONTAINED ON SUCCEEDING PAGES] 5

IN WITNESS WHEREOF, Company, the Banks and Agent have each caused this Third Amendment to be executed by their respective duly authorized officers or agents, as applicable, all as of the date first set forth above. COMPANY: AGENT: VISHAY INTERTECHNOLOGY, INC. COMERICA BANK, as Agent By: /s/ Richard N. Grubb By: /s/ Dan M. Roman -------------------- -------------------- Its: Executive Vice President Its: Vice President 63 Lincoln Highway One Detroit Center Malvern, Pennsylvania 19355 500 Woodward Avenue Detroit, Michigan 48226 Attention: National Division 6

BANKS: COMERICA BANK By: /s/ Dan M. Roman ----------------- Dan M. Roman Its: Vice President NATIONSBANK OF NORTH CAROLINA, N.A. By: /s/ Yousuf Omar --------------- Yousuf Omar Its: Senior Vice President SIGNET BANK/MARYLAND By: /s/ Janice E. Godwin -------------------- Janice E. Godwin Its: Vice President CORESTATES BANK, N.A., formerly known as and continuing to do business under the name of THE PHILADELPHIA NATIONAL BANK By: /s/ Kathleen Stucy -------------------- Kathleen Stucy Its: Senior Vice President BERLINER HANDELS-UND FRANKFURTER BANK By: /s/ Dana L. McDougall - ------------------------ Its: Vice President BANK HAPOALIM, B.M. By: /s/ Carl Kopfinger ------------------ Carl Kopfinger Its: Vice President BANK LEUMI le-ISRAEL, B.M. By: /s/ Y. Apelker - ------------------ Its: Authorized Representative ABN AMRO BANK N.V. NEW YORK BRANCH By: /s/ Nancy W. Lanzoni -------------------- Nancy W. Lanzoni Its: Group Vice President and By: /s/ John M. Kinney - ---------------------- John M. Kinney Its: Assistant Vice President 7

CREDIT LYONNAIS NEW YORK BRANCH By: /s/ Robert Ivosevich -------------------- Robert Ivosevich Its: Senior Vice President CREDIT SUISSE By: /s/ David Finney ---------------- David Finney Its: Managing Director AND By: /s/ Tom Muoio - ----------------- Tom Muoio Its: Vice President FLEET NATIONAL BANK, formerly known as SHAWMUT BANK, N.A. By: Authorized Representative ------------------------- ACKNOWLEDGED AND AGREED BY THE PERMITTED BORROWERS: VISHAY EUROPE GmbH By: /s/ Richard N. Grubb -------------------- Richard N. Grubb Its: Authorized Representative DRALORIC ELECTRONIC GmbH By: /s/ Richard N. Grubb -------------------- Richard N. Grubb Its: Authorized Representative 8

5 1,000 6-MOS DEC-31-1996 JUN-30-1997 37,192 0 179,431 4,818 326,434 620,660 1,007,361 332,694 1,514,887 205,671 0 0 0 5,645 942,905 1,514,887 545,923 545,923 414,689 414,689 69,249 0 7,265 54,720 15,114 39,606 0 0 0 39,606 .62 .62