As filed with the Securities and Exchange Commission on August 8, 2003
Registration No. 333-102507
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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VISHAY INTERTECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 3670 38-1686453
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
---------------
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
Maximum
Title of each class of Amount to Offering Price Aggregate Amount of
securities to be registered be Registered(1) Per Unit Offering Price Registration Fee (2)
--------------------------------------------- ----------------- --------------- ----------------------- -----------------------
Common Stock, par value $0.10 per share
(3)...................................... 6,176,467 $12.38 (4) $76,464,661.46 $7,034.75
--------------------------------------------- ----------------- --------------- ----------------------- -----------------------
Class A Warrants to purchase Common
Stock, at an exercise price of $20.00 7,000,000 -- (5) -- (5) -- (5)
per share................................
--------------------------------------------- ----------------- --------------- ----------------------- -----------------------
Class B Warrants to purchase Common
Stock, at an exercise price of $30.30 1,823,529 -- (5) -- (5) -- (5)
per share................................
--------------------------------------------- ----------------- --------------- ----------------------- -----------------------
Common Stock, par value $0.10 per share
(6) ..................................... 7,000,000 $20.00 $140,000,000.00 $11,326.00
--------------------------------------------- ----------------- --------------- ----------------------- -----------------------
Common Stock, par value $0.10 per share 1,823,529 $30.30 $55,525,628.70 $4,492.02
(7) .....................................
--------------------------------------------- ----------------- --------------- ----------------------- -----------------------
(1) Pursuant to Rule 416 of the Securities Act of 1933, this registration
statement also covers such additional shares that may be issued pursuant
to the anti-dilution and transactional adjustment provisions of the notes
and warrants.
(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) Issuable upon exercise of the Class A Warrants, for which the exercise
price is $20.00 per share of common stock.
(7) Issuable upon exercise of the Class B Warrants, for which the exercise
price is $30.30 per share of common stock.
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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 August 8, 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.
-------------------
Our shares of common stock trade on the New York Stock Exchange under
the symbol "VSH". On August 7, 2003, the last sale price of the shares as
reported on the New York Stock Exchange was $12.72 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 not complete and may 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..................................................................5
USE OF PROCEEDS..............................................................10
DESCRIPTION OF CAPITAL STOCK.................................................10
DESCRIPTION OF THE WARRANTS..................................................12
SELLING SECURITYHOLDERS......................................................25
PLAN OF DISTRIBUTION.........................................................28
LEGAL MATTERS................................................................30
EXPERTS......................................................................30
WHERE YOU CAN FIND MORE INFORMATION..........................................30
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-
Recent Developments
Second Quarter 2003 Results
On July 30, 2003, we announced our unaudited financial results for
the quarter ended June 30, 2003. Sales for the quarter totaled $538.1 million,
an increase of 17.5% over sales of $457.9 million for the quarter ended June 30,
2002. Gross profit was $123.3 million, an increase of 14.6% over gross profit of
$107.6 million for the quarter ended June 30, 2002. Operating income was $15.2
million, a decrease of 49.4% over operating income of $30.0 million for the
quarter ended June 30, 2002. Income tax expense was $1.2 million for the quarter
ended June 30, 2003 as compared to $5.2 million for the quarter ended June 30,
2002. Net earnings were $2.9 million, or $0.02 per share, a decrease of 81.4%
over net earnings of $15.6 million, or $0.10 per share, for the quarter ended
June 30, 2002. Our book-to-bill ratio for the quarter ended June 30, 2003 was
0.96 in both the active and passive business segments. Our backlog was $419.8
million at June 30, 2003.
Other Recent Developments
On August 6, 2003, we sold $450 million aggregate principal amount of
our 3 5/8% convertible subordinated notes due 2023 and granted the initial
purchasers an option to purchase, within 30 days of the date of the offering
memorandum relating to the notes, an additional $50 million of the notes. The
notes will pay interest semi-annually. Holders may convert their notes into
shares of our common stock, subject to certain conditions, at a conversion price
of $21.28 per share, which is the equivalent to a conversion rate of 46.9925
shares per $1,000 principal amount of notes. The notes are subordinated in right
of payment to all of our existing and future senior indebtedness and will be
effectively subordinated to all existing and future liabilities of our
subsidiaries. The notes will be redeemable at our option beginning August 1,
2010 at a redemption price equal to 100% of the principal amount plus accrued
and unpaid interest, if any. Holders of the notes will have the right to require
us to repurchase all or some of their notes at a purchase price equal to 100% of
their principal amount of the notes, plus accrued and unpaid interest, if any,
on August 1, 2008, August 1, 2010, August 1, 2013 and August 1, 2018. In
addition, holders of the notes will have the right to require us to repurchase
all or some of their notes upon the occurrence of certain events constituting a
fundamental change. On any required repurchase, we may choose to pay the
purchase price in cash or shares of our common stock or any combination of cash
and our common stock.
We offered the convertible subordinated notes only to qualified
institutional buyers. Neither the notes nor the shares of our common stock
issuable upon conversion of the notes have been registered under the Securities
Act or any state securities laws, and until so registered, may not be offered or
sold in the United States or any state absent registration or an applicable
exemption from registration requirements.
We used approximately $130 million of the proceeds of the offering of
the convertible subordinated notes to pay down our revolving credit facility and
approximately $97.4 million to fund the purchase of approximately $97.0 million
accreted principal amount of our Liquid Yield Option(TM) Notes (LYONs). We
expect to use proximately $176.6 million of the offering proceeds (exclusively
of accrued interest of approximately $2.3 million) to fund the redemption of the
convertible notes of our General Semiconductor subsidiary referred to below. We
intend to use the remaining proceeds for general corporate purposes.
We have agreed with the lenders under our secured revolving credit
facility to an amendment and restatement of the agreement governing the
facility. The maximum availability under the facility, in light of our
anticipated liquidity needs, has been changed from $500 million to $400 million,
and the final maturity of the facility has been extended from June 2005 to May
2007. The restatement decreases our minimum tangible net worth requirement to
$850 million, eliminates the minimum earnings before interest and tax
requirement, permits securitization of up to $200 million of non-U.S. accounts
receivable, allows for the release of all collateral (other than subsidiary
stock and pledges by us and our subsidiaries of intercompany notes) under
certain circumstances and creates an event of default upon the occurrence of a
fundamental change as defined under our convertible subordinated notes.
We have called for redemption on September 10, 2003 all of the
outstanding 5.75% convertible subordinated notes due 2006 of our General
Semiconductor subsidiary. There are presently $171,000,000 principal
-3-
amount of the General Semiconductor notes outstanding. These notes are
redeemable at a price of 103.286% of their principal amount, plus accrued but
unpaid interest to the date of redemption..
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.
-4-
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.
-5-
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.
-6-
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.
-7-
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
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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.
The existence of the Class B common stock may deprive other stockholders of a
premium value for their shares in a takeover.
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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.
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.
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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.
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.
-11-
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.
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.
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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
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
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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.
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.
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.
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:
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
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.
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;
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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.
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.
The warrant holder will receive, at the holder's election, either:
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.
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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.
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 ))
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
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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
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:
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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.
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
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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 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:
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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.
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.
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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.
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,
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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
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
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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.
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.
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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:
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.
-24-
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.
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 , 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.
-25-
Shares of
Common Stock
Beneficially
Shares of Owned Upon
Shares Shares Common Stock Completion of the
Issuable on Issuable on Beneficially Offering
Exchange Exercise of Owned Before --------------------
of Notes Class A Class B Warrants the Offering Number
Name (1) (2) Warrants Warrants (3) (4) of Shares Percentage
-------------------------------------- ------------- ------------- ------------ -------------- -------------- --------- ----------
Phoenix Bermuda L.P.*(5) 237,529 6,540,296 1,703,774 8,244,070
--------------------------------------
European Private Equity Investors -- 459,704 119,755 579,459
L.L.C.*(6)
--------------------------------------
Sankaty High Yield Asset Partners 531,000 -- -- --
L.P.*(7)
--------------------------------------
BCM Capital Partners L.P.*(8) 359,588 -- -- --
--------------------------------------
BCIP Associates II*(9) 2,000 -- -- --
--------------------------------------
BCIP Trust Associates II*(10) 9,764 -- -- --
--------------------------------------
JP Morgan Partners (BHCA) L.P.*(11) 2,794,588 -- -- --
--------------------------------------
GarMark Partners L.P.*(12) 1,747,058 -- -- --
--------------------------------------
BCIP Trust Associates II-B*(13) 176 -- -- --
--------------------------------------
Bain Capital V Mezzanine Fund 494,764 -- -- --
L.P.*(14)
-------------------------
* 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) Phoenix Bermuda L.P. shares beneficial ownership with Compass Partners
European Equity Fund (Bermuda) L.P.
(6) The beneficial owner of European Private Equity Investors L.L.C. is
General Electric Pension Trust.
(7) 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.
(8) 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.
(9) 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.
-26-
(10) 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.
(11) 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.
(12) 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.
(13) 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.
(14) 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, we believe that 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.
-27-
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.
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 underwriter, 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 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
-28-
accompanying prospectus supplement or, if appropriate, 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 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.
-29-
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.
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
-30-
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 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:
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 50,000
Accounting fees and expenses 15,000
Printing and engraving expenses 25,000
Miscellaneous 12,147
--------------
Total $125,000
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 dated August 3, 1995 (incorporated by reference to Exhibit
3.1 to our Form 10-Q for the quarter ended June 30, 1995).
3.2 Certificate of Amendment of Composite Amended and Restated
Certificate of Incorporation of Vishay (incorporated by reference
to Exhibit 3.1 to our Form 10-Q for the quarter ended June 30,
1997).
3.3 Certificate of Amendment of the Amended and Restated Certificate
of Incorporation of Vishay (incorporated by reference to Exhibit
3.1 to our Form 8-K filed on November 13, 2001).
3.4 Certificate of Amendment of the Amended and Restated Certificate
of Incorporation of Vishay Intertechnology, Inc., filed July 31,
2003 (incorporated by reference to Exhibit 3.1 to our Form 8-K
filed on August 8, 2003).
3.5 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.*
8.1 Opinion of Kramer Levin Naftalis & Frankel LLP regarding tax
matters.*
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
Exhibit 5.1).
----------------------
* Filed herewith.
II-2
24 Power of Attorney.**
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) 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.
---------------------
** Filed herewith with respect to directors Dr. Abraham Ludomirski and
Phillipe Gazeau.
Otherwise previously filed.
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 8th day
of August, 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 August 8,
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
Executive Vice President, Treasurer and Chief
/S/ * Financial Officer (Principal Financial and
------------------------------ Accounting Officer)
RICHARD N. GRUBB
/S/ AVI D. EDEN Director, Vice Chairman of the Board and
------------------------------ Executive Vice President
AVI D. EDEN
/S/ PHILLIPE GAZEAU Director
------------------------------
PHILLIPE GAZEAU
/S/ * Director
------------------------------
ELI HURVITZ
/S/ * Director, President and Chief Operating Officer
------------------------------
GERALD PAUL
/S/ ABRAHAM LUDOMIRSKI 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 dated August 3, 1995 (incorporated by reference to Exhibit
3.1 to our Form 10-Q for the quarter ended June 30, 1995).
3.2 Certificate of Amendment of Composite Amended and Restated
Certificate of Incorporation of Vishay (incorporated by reference
to Exhibit 3.1 to our Form 10-Q for the quarter ended June 30,
1997).
3.3 Certificate of Amendment of the Amended and Restated Certificate
of Incorporation of Vishay (incorporated by reference to Exhibit
3.1 to our Form 8-K filed on November 13, 2001).
3.4 Certificate of Amendment of the Amended and Restated Certificate
of Incorporation of Vishay Intertechnology, Inc., filed July 31,
2003. (incorporated by reference to Exhibit 3.1 to our Form 8-K
filed on August 8, 2003).
3.5 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.*
8.1 Opinion of Kramer Levin Naftalis & Frankel LLP regarding tax
matters.*
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
Exhibit 5.1).
24 Power of Attorney.**
-----------------------
** Filed herewith with respect to directors Dr. Abraham Ludomirski and
Phillipe Gazeau. Otherwise previously filed.