Note 6 – Long-Term Debt

Long-term debt consists of the following:

	December 31, 2014		December 31, 2013

Credit facility	$	200,000	$	114,000
Exchangeable unsecured notes, due 2102		38,642		38,642
Convertible senior debentures, due 2040		103,841		101,846
Convertible senior debentures, due 2041		53,249		52,264
Convertible senior debentures, due 2042		59,190		58,159
		454,922		364,911
Less current portion		-		-
	$	454,922	$	364,911

Credit Facility

The Company maintains a credit facility with a consortium of banks led by JPMorgan Chase Bank, N.A., as administrative agent (the "Credit Facility"). On August 8, 2013, the Company entered into an Amended and Restated Credit Agreement, which provides an aggregate commitment of $640,000 of revolving loans available until August 8, 2018. The original credit agreement became effective December 1, 2010 and was scheduled to expire on December 1, 2015. The Credit Facility, as amended and restated, also provides for the ability of Vishay to request up to $50,000 of incremental revolving commitments, subject to the satisfaction of certain conditions.

Borrowings under the Credit Facility bear interest at the London Interbank Offered Rate ("LIBOR") plus an interest margin. The applicable interest margin is based on the Company's leverage ratio. Based on the Company's current leverage ratio, borrowings bear interest at LIBOR plus 1.75%. The interest rate on the Company's borrowings will increase to LIBOR plus 2.00% if the Company's leverage ratio equals or exceeds 2.50 to 1 and will decrease to LIBOR plus 1.50% if the Company's leverage ratio decreases below 1.50 to 1. Vishay is also required to pay facility fees on the entire commitment amount based on the Company's leverage ratio. Based on the Company's current leverage ratio, the facility fee is 0.35% per annum. Such facility fee will increase to 0.50% per annum if the Company's leverage ratio equals or exceeds 2.50 to 1 and will decrease to 0.30% per annum if the leverage ratio decreases below 1.50 to 1.

The August 8, 2013 Amended and Restated Credit Agreement also removes certain restrictions related to the incurrence and repayment of certain intercompany indebtedness, mergers, liquidations, and transfers of ownership of wholly owned subsidiaries that were present in the original credit agreement. These changes will enable the Company to streamline its complex subsidiary structure and provide greater operating flexibility.

The borrowings under the Credit Facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed for use in, or arising under the laws of, any country other than the United States, assets located outside of the United States and deposit and securities accounts), of Vishay and certain significant subsidiaries located in the United States, and pledges of stock in certain significant domestic and foreign subsidiaries; and are guaranteed by certain significant subsidiaries. Certain of the Company's subsidiaries are permitted to borrow under the Credit Facility, subject to the satisfaction of specified conditions. Any borrowings by these subsidiaries under the Credit Facility are guaranteed by Vishay and certain subsidiaries. The Credit Facility also limits or restricts the Company and its subsidiaries, from, among other things, incurring indebtedness, incurring liens on its respective assets, making investments and acquisitions, making asset sales, and making other restricted payments, and requires the Company to comply with other covenants, including the maintenance of specific financial ratios.

The Credit Facility permits the Company to repurchase shares of its common stock or pay cash dividends up to a permitted capacity, conditioned upon Vishay maintaining (i) a pro forma leverage ratio of 2.75 to 1.00, (ii) a pro forma interest expense coverage ratio of 2.00 to 1.00, and (iii) $300,000 of available liquidity, as defined in the Credit Facility. The permitted capacity to repurchase shares of the Company's outstanding common stock or pay cash dividends under the Credit Facility increases each quarter by an amount equal to 20% of net income. At December 31, 2014, the Credit Facility allows the Company to repurchase its common stock or pay cash dividends up to $192,733 (See Note 7). The amount and timing of any future stock repurchases or cash dividends remains subject to authorization of the Company's Board of Directors.

Note 6 – Long-Term Debt (continued)

The Credit Facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or default under other material debt, material misrepresentation or breach of warranty, violation of certain covenants, a change of control, the commencement of bankruptcy proceedings, the insolvency of Vishay or certain of its significant subsidiaries, and the rendering of a judgment in excess of $25,000 against Vishay or certain of its significant subsidiaries. Upon the occurrence of an event of default under the Credit Facility, the Company's obligations under the credit facility may be accelerated and the lending commitments under the credit facility terminated.

At December 31, 2014 and 2013, there was $432,445 and $518,345, respectively, available under the Credit Facility. Letters of credit totaling $7,555 and $7,655 were outstanding at December 31, 2014 and 2013, respectively.

Convertible Senior Debentures

Vishay currently has three issuances of convertible senior debentures outstanding with generally congruent terms. The proceeds from the issuance of the convertible senior debentures were used to repurchase shares of the Company's common stock. The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for each issuance of the Company's convertible senior debentures effective as of the ex-dividend date of each cash dividend.

The following table summarizes some key facts and terms regarding the three series of outstanding convertible senior debentures following the adjustment made to the conversion rate of the debentures on the ex-dividend date of the December 16, 2014 dividend payment:

	Due 2040			Due 2041			Due 2042

Issuance date	November 9, 2010			May 13, 2011			May 31, 2012
Maturity date	November 15, 2040			May 15, 2041			June 1, 2042
Principal amount	$	275,000		$	150,000		$	150,000
Cash coupon rate (per annum)		2.25	%		2.25	%		2.25	%
Nonconvertible debt borrowing rate at issuance (per annum)		8.00	%		8.375	%		7.50	%
Conversion rate effective November 24, 2014 (per $1 principal amount)		73.2147			53.4282			86.0829
Effective conversion price effective November 24, 2014 (per share)	$	13.66		$	18.72		$	11.62
130% of the conversion price (per share)	$	17.76		$	24.34		$	15.11
Call date	November 20, 2020			May 20, 2021			June 7, 2022

Prior to three months before the maturity date, the holders may only convert their debentures under the following circumstances: (1) during any fiscal quarter after the first full quarter subsequent to issuance, if the sale price of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the debentures falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; (3) Vishay calls any or all of the debentures for redemption, at any time prior to the close of business on the third scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events.

The convertible debentures due 2042 became convertible subsequent to the September 27, 2014 evaluation of the conversion criteria, due to the sale price of Vishay's common stock exceeding 130% of the conversion price for the applicable period in the third fiscal quarter of 2014. The debentures due 2042 remained convertible until December 31, 2014, at which time the conversion criteria was reevaluated. The convertible debentures due 2042 are no longer convertible subsequent to the December 31, 2014 reevaluation of the conversion criteria. The conversion criteria of the convertible senior debentures due 2040, due 2041, and due 2042 will continue to be evaluated and the convertible debentures may become convertible again in the future. The debentures are convertible, subject to certain conditions, into cash, shares of Vishay's common stock or a combination thereof, at Vishay's option, at the conversion rate. At the direction of its Board of Directors, the Company intends, upon future conversion of any of the convertible senior debentures, to repay the principal amounts of the convertible senior debentures in cash and settle any additional amounts in shares of Vishay common stock. The Company intends to finance the principal amount of any converted debentures using borrowings under its credit facility. Accordingly, the debt component of the convertible debentures due 2042 remained classified as a non-current liability in the consolidated balance sheets during the period such debentures were convertible.

Vishay must provide additional shares upon conversion if there is a "fundamental change" in the business as defined in the indenture governing the debentures.

Vishay may not redeem the debentures prior to the respective call dates. On or after the call date and prior to the maturity date, Vishay may redeem for cash all or part of the debentures at a redemption price equal to 100% of the principal amount of the debentures to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of Vishay's common stock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period prior to the date on which Vishay provides notice of redemption.

Note 6 – Long-Term Debt (continued)

GAAP requires an issuer to separately account for the liability and equity components of the instrument in a manner that reflects the issuer's nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. The resulting discount on the debt is amortized as non-cash interest expense in future periods.

The carrying values of the liability and equity components of the convertible debentures are reflected in the Company's consolidated balance sheets as follows:

	Principal amount of the debentures		Unamortized discount			Embedded derivative		Carrying value of liability component		Equity component - net carrying value

December 31, 2014
Due 2040	$	275,000		(171,685	)		526	$	103,841	$	110,094
Due 2041	$	150,000		(97,092	)		341	$	53,249	$	62,246
Due 2042	$	150,000		(91,048	)		238	$	59,190	$	57,874
Total	$	575,000	$	(359,825	)	$	1,105	$	216,280	$	230,214

December 31, 2013
Due 2040	$	275,000		(173,645	)		491	$	101,846	$	110,094
Due 2041	$	150,000		(98,085	)		349	$	52,264	$	62,246
Due 2042	$	150,000		(92,038	)		197	$	58,159	$	57,874
Total	$	575,000	$	(363,768	)	$	1,037	$	212,269	$	230,214

Interest is payable on the debentures semi-annually at the cash coupon rate; however, the remaining debt discount is being amortized as additional non-cash interest expense using an effective annual interest rate equal to the Company's estimated nonconvertible debt borrowing rate at the time of issuance. In addition to ordinary interest, contingent interest will accrue in certain circumstances relating to the trading price of the debentures and under certain other circumstances beginning ten years subsequent to issuance.

Interest expense related to the debentures is reflected on the consolidated statements of operations for the years ended December 31:

	Contractual coupon interest		Non-cash amortization of debt discount		Non-cash amortization of deferred financing costs		Non-cash change in value of derivative liability			Total interest expense related to the debentures

2014
Due 2040	$	6,188		1,960		88		35		$	8,271
Due 2041	$	3,375		993		47		(8	)	$	4,407
Due 2042	$	3,375		990		54		41		$	4,460
Total	$	12,938	$	3,943	$	189	$	68		$	17,138

2013
Due 2040	$	6,188		1,811		88		(131	)	$	7,956
Due 2041	$	3,375		915		47		(50	)	$	4,287
Due 2042	$	3,375		920		54		(85	)	$	4,264
Total	$	12,938	$	3,646	$	189	$	(266	)	$	16,507

2012
Due 2040	$	6,188		1,675		88		28		$	7,979
Due 2041	$	3,375		843		45		7		$	4,270
Due 2042	$	1,978		510		32		46		$	2,566
Total	$	11,541	$	3,028	$	165	$	81		$	14,815

Note 6 – Long-Term Debt (continued)

Exchangeable Unsecured Notes, due 2102

On December 13, 2002, Vishay issued $105,000 in nominal (or principal) amount of its floating rate unsecured exchangeable notes due 2102 in connection with an acquisition. The notes are governed by a note instrument and a put and call agreement dated December 13, 2002. The notes may be put to Vishay in exchange for shares of its common stock and, under certain circumstances, may be called by Vishay for similar consideration.

Under the terms of the put and call agreement, by reason of the spin-off of VPG on July 6, 2010, Vishay was required to take action so that the existing notes are deemed exchanged as of the date of the spin-off, for a combination of new notes of Vishay reflecting a lower principal amount of the notes and new notes issued by VPG.

Based on the relative trading prices of Vishay and VPG common stock on the ten trading days following the spin-off, Vishay retained the liability for an aggregate $95,042 principal amount of exchangeable notes effective July 6, 2010. The assumption of a portion of the liability by VPG was recorded as a reduction in parent net investment just prior to the completion of the spin-off.

Under the terms of the put and call agreement the holders may at any time put the notes to Vishay in exchange for shares of Vishay's common stock, and Vishay may call the notes in exchange for cash or for shares of its common stock at any time after January 2, 2018. Subsequent to the spin-off of VPG, the put/call rate of the Vishay notes is $15.39 per share of common stock.

The payment of quarterly cash dividends does not result in an adjustment to the put/call rate of the notes (See Note 7).

Effective August 26, 2013, a holder of the notes exercised its option to exchange $56,400 principal amount of the notes for 3,664,729 shares of Vishay common stock. Following this transaction, Vishay had outstanding exchangeable unsecured notes with a principal amount of $38,642, which are exchangeable for an aggregate of 2,511,742 shares of Vishay common stock.

The notes bear interest at LIBOR. Interest continues to be payable quarterly on March 31, June 30, September 30, and December 31 of each calendar year.

Other Borrowings Information

Aggregate annual maturities of long-term debt, based on the terms stated in the respective agreements, are as follows:

2015	$	-
2016		-
2017		-
2018		200,000
2019		-
Thereafter		613,642

The annual maturities of long-term debt are based on the amount required to settle the obligation. Accordingly, the discounts associated with the convertible debentures due 2040, due 2041, and due 2042 are excluded from the calculation of the annual maturities of long-term debt in the table above.

At December 31, 2014, the Company had committed and uncommitted short-term credit lines with various U.S. and foreign banks aggregating approximately $16,700, with substantially no amounts borrowed. At December 31, 2013, the Company had committed and uncommitted short-term credit lines with various U.S. and foreign banks aggregating approximately $27,400, with substantially no amounts borrowed.

Interest paid was $18,394, $17,647, and $16,578 for the years ended December 31, 2014, 2013, and 2012, respectively.

See Note 18 for further discussion on the fair value of the Company's long-term debt.