Note 5 – Long-Term Debt

Long-term debt consists of the following:

	July 2, 2016			December 31, 2015

Credit facility	$	124,000		$	190,000
Exchangeable unsecured notes, due 2102		-			38,642
Convertible senior debentures, due 2040		107,099			106,011
Convertible senior debentures, due 2041		54,963			54,424
Convertible senior debentures, due 2042		60,852			60,320
Deferred financing costs		(11,770	)		(12,659	)
		335,144			436,738
Less current portion		-			-
	$	335,144		$	436,738

Convertible Senior Debentures

Vishay currently has three issuances of convertible senior debentures outstanding with generally congruent terms. 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 June 29, 2016 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 June 13, 2016 (per $1 principal amount)		75.4595			55.0664			88.7223
Effective conversion price effective June 13, 2016 (per share)	$	13.25		$	18.16		$	11.27
130% of the conversion price (per share)	$	17.23		$	23.61		$	14.65
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.

Based on an evaluation of the conversion criteria at July 2, 2016 and December 31, 2015, none of the convertible senior debentures due 2040, due 2041, or due 2042 were convertible. The conversion criteria of the debentures will continue to be evaluated and the debentures may become convertible in the future. At the direction of the Company's Board of Directors, the Company intends, upon conversion, to repay the principal amount of the convertible debentures in cash and settle any additional amounts in shares of the Company's common stock. The Company intends to finance the principal amount of any converted debentures using borrowings under its credit facility.

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 condensed balance sheets as follows:

	Principal amount of the debentures		Unamortized discount			Embedded derivative		Carrying value of liability component		Equity component - net carrying value
July 2, 2016
Due 2040	$	275,000		(168,442	)		541	$	107,099	$	110,094
Due 2041	$	150,000		(95,441	)		404	$	54,963	$	62,246
Due 2042	$	150,000		(89,419	)		271	$	60,852	$	57,874
Total	$	575,000	$	(353,302	)	$	1,216	$	222,914	$	230,214

December 31, 2015
Due 2040	$	275,000		(169,565	)		576	$	106,011	$	110,094
Due 2041	$	150,000		(96,014	)		438	$	54,424	$	62,246
Due 2042	$	150,000		(89,982	)		302	$	60,320	$	57,874
Total	$	575,000	$	(355,561	)	$	1,316	$	220,755	$	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 condensed statements of operations for the fiscal quarters ended:

	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
July 2, 2016
Due 2040	$	1,547		567		22		(41	)	$	2,095
Due 2041	$	844		289		13		(72	)	$	1,074
Due 2042	$	844		283		14		(14	)	$	1,127
Total	$	3,235	$	1,139	$	49	$	(127	)	$	4,296

July 4, 2015
Due 2040	$	1,547		524		22		165		$	2,258
Due 2041	$	844		267		12		124		$	1,247
Due 2042	$	844		263		14		46		$	1,167
Total	$	3,235	$	1,054	$	48	$	335		$	4,672

Interest expense related to the debentures is reflected on the consolidated condensed statements of operations for the six fiscal months ended:

	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
July 2, 2016
Due 2040	$	3,094		1,123		44		(35	)	$	4,226
Due 2041	$	1,688		573		24		(34	)	$	2,251
Due 2042	$	1,688		563		27		(31	)	$	2,247
Total	$	6,470	$	2,259	$	95	$	(100	)	$	8,724

July 4, 2015
Due 2040	$	3,094		1,039		44		106		$	4,283
Due 2041	$	1,688		528		24		137		$	2,377
Due 2042	$	1,688		523		27		39		$	2,277
Total	$	6,470	$	2,090	$	95	$	282		$	8,937

Exchangeable Unsecured Notes, due 2102

On June 28, 2016 and March 31, 2016, pursuant to agreements dated June 13, 2016 and March 10, 2016, respectively, the Company acquired from holders $12,436 and $26,206, respectively, principal amount of the Company's floating rate exchangeable unsecured notes due 2102. The purchase price for these privately negotiated transactions was $11,449 and $22,595, respectively. Vishay recognized gains on early extinguishment of debt of $986 and $4,597 presented as a separate line item in the accompanying consolidated condensed statements of operations for the fiscal quarter and six fiscal months ended July 2, 2016, respectively.

The notes that Vishay repurchased in the fiscal quarter and six fiscal months ended July 2, 2016 had been exchangeable for 807,995 and 2,510,808 shares of Vishay common stock, respectively.

Following the June 28, 2016 transaction, no exchangeable unsecured notes are outstanding.