-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 MQTEz8JZjWbtce1dbjjyoDZQ42GOZIEZTjmtS/fmB647w13HJVGIbBOVqwzrqSNa
 OT5dN+9dRipBHD1t5tgnJA==

<SEC-DOCUMENT>0001206774-08-001766.txt : 20081104
<SEC-HEADER>0001206774-08-001766.hdr.sgml : 20081104
<ACCEPTANCE-DATETIME>20081104060113
ACCESSION NUMBER:		0001206774-08-001766
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20080927
FILED AS OF DATE:		20081104
DATE AS OF CHANGE:		20081104

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			VISHAY INTERTECHNOLOGY INC
		CENTRAL INDEX KEY:			0000103730
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPONENTS & ACCESSORIES [3670]
		IRS NUMBER:				381686453
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-07416
		FILM NUMBER:		081159068

	BUSINESS ADDRESS:	
		STREET 1:		63 LINCOLN HWY
		CITY:			MALVERN
		STATE:			PA
		ZIP:			19355
		BUSINESS PHONE:		6106441300

	MAIL ADDRESS:	
		STREET 1:		63 LINCOLN HIGHWAY
		CITY:			MALVERN
		STATE:			PA
		ZIP:			19355
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>vishay_10q.htm
<DESCRIPTION>QUARTERLY REPORT
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">
<BR>
<HR color=black SIZE=1>

<HR color=black SIZE=1>

<DIV align=center><FONT face=serif size=5></FONT><B><FONT face=serif size=2>UNITED STATES<BR></FONT></B><B><FONT face=serif size=2>SECURITIES AND
EXCHANGE COMMISSION<BR>Washington, D.C. 20549</FONT></B></DIV>
<P align=center><B><FONT face=serif size=2></FONT></B><B><FONT face=serif size=4>FORM 10-Q</FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><FONT face=serif size=2>(Mark
      One)</FONT></TD></TR>
  <TR>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%"><FONT face=serif size=2><FONT face=wingdings size=2>x</FONT></FONT></TD>
    <TD vAlign=top align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD vAlign=top align=left width="98%"><B><FONT face=serif size=2>QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For the quarterly period
      ended&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;September
      27,
      2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></B></TD></TR>
  <TR>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%"><FONT face=wingdings size=2>o</FONT></TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><B><FONT face=serif size=2>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><B><FONT face=serif size=2>&nbsp;</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top align=left width="1%">&nbsp;</TD>
    <TD vAlign=top align=left width="1%"></TD>
    <TD vAlign=top align=left width="98%"><STRONG><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>For the
      transition period from __________&nbsp;to
    __________</FONT></FONT></STRONG></TD></TR></TABLE><BR>
<P align=center><B><FONT face=serif size=2>Commission File Number</FONT></B>
<B><U><FONT face=serif size=2>1-7416</FONT></U></B><FONT face=serif size=2></FONT></P>
<P align=center><B><FONT face=serif size=4>VISHAY INTERTECHNOLOGY,
INC.<BR></FONT></B><FONT face=serif size=2>(Exact name of registrant as
specified in its charter)</FONT></P>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="45%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><STRONG>Delaware</STRONG></FONT>&nbsp;</TD>
    <TD noWrap align=center width="5%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="49%">&nbsp;<B><FONT face=serif size=2>38-1686453</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="45%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>(State or Other Jurisdiction of
    Incorporation)</FONT>&nbsp;</TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="49%">&nbsp;<FONT face=serif size=2>(I.R.S.
      Employer Identification Number)</FONT>&nbsp;</TD></TR>
  <TR>
    <TD align=center width="99%" colSpan=3>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="45%">&nbsp;<B><FONT face=serif size=2>63
      Lancaster Avenue</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="49%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="45%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT><STRONG>Malvern, PA
19355-2143</STRONG></FONT>&nbsp;</TD>
    <TD noWrap align=center width="5%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="49%">&nbsp;<B><FONT face=serif size=2>610-644-1300</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="45%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>(Address of Principal Executive
    Offices)</FONT>&nbsp;</TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="49%"><FONT face=serif size=2><FONT size=3>&nbsp;</FONT>(Registrant&#146;s Area Code and Telephone
    Number)</FONT>&nbsp;</TD></TR></TABLE></DIV><BR>
<P align=justify><FONT face=serif size=2>Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. <FONT face=wingdings size=2>x</FONT> Yes&nbsp; <FONT face=wingdings size=2>o</FONT>
No</FONT></P>
<P align=justify><FONT size=2>Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of &#147;accelerated filer and large accelerated filer&#148; in Rule 12b-2 of
the Exchange Act. (Check one):</FONT></P>
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="48%"><FONT size=2>Large accelerated filer
      </FONT><FONT face=sans-serif size=2><FONT face=Wingdings size=2><FONT face=Wingdings>x</FONT></FONT></FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="51%"><FONT face=serif size=2>Accelerated
      filer </FONT><FONT face=Wingdings size=2>o</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="48%"><FONT face=serif size=2>Non-accelerated
      filer <FONT face=Wingdings size=2>o</FONT></FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>(Do not check if smaller reporting
      company)</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="51%"><FONT face=serif size=2>Smaller
      reporting company <FONT face=Wingdings size=2>o</FONT><FONT size=3>&nbsp;
      </FONT></FONT></TD></TR></TABLE></DIV>
<P align=justify><FONT face=serif size=2>Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
</FONT><FONT face=sans-serif size=2><FONT face=Wingdings>o</FONT><FONT face="Times New Roman"> </FONT></FONT><FONT size=2>Yes&nbsp; <FONT face=wingdings size=2>x</FONT> </FONT><FONT face=serif size=2>No</FONT></P>
<P align=justify><FONT face=serif size=2>As of October 31, 2008, the registrant
had 172,200,536 shares of its common stock and 14,352,888 shares of its Class B
common stock outstanding. </FONT></P>
<HR color=black SIZE=1>

<HR color=black SIZE=1>
<BR>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2></FONT></U></B>&nbsp;</P>
<P align=justify><STRONG><U><FONT size=2></FONT></U></STRONG>&nbsp;</P>
<P align=justify><B><U><FONT face=serif size=2></FONT></U></B>&nbsp;</P>
<P align=justify><B><U><FONT face=serif size=2></FONT></U></B>&nbsp;</P>
<P align=center><B><U><FONT face=serif size=2>This page intentionally left
blank.</FONT></U></B></P>
<P align=center><FONT face=serif size=2></FONT>&nbsp;</P>
<P align=center><FONT face=serif size=2></FONT>&nbsp;</P>
<P align=center><FONT face=serif size=2></FONT>&nbsp;</P>
<P align=center><FONT size=2></FONT>&nbsp;</P>
<P align=center><FONT size=2></FONT>&nbsp;</P>
<P align=center><FONT size=2></FONT>&nbsp;</P>
<P align=center><FONT face=serif size=2></FONT>&nbsp;</P>
<P align=center><FONT face=serif size=2></FONT>&nbsp;</P>
<P align=center><FONT face=serif size=2></FONT>&nbsp;</P>
<P align=center><FONT face=serif size=2></FONT>&nbsp;</P>
<P align=center><FONT face=serif size=2>2 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=center><B><FONT face=serif>VISHAY INTERTECHNOLOGY, INC.</FONT></B></P>
<P align=center><B><FONT face=serif>FORM 10-Q<BR></FONT></B><B><FONT face=serif>SEPTEMBER 27, 2008</FONT></B></P>
<P align=center><B><FONT face=serif>CONTENTS </FONT></B></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="82%">&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=center width="8%"><FONT face=serif size=2>Page</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%"><FONT face=serif size=2>Number</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>PART I.</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><B><FONT face=serif size=2>FINANCIAL INFORMATION</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 1.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Financial Statements</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Consolidated Condensed Balance Sheets &#150;</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp; &nbsp;&nbsp;
      <FONT face=serif size=2>September 27, 2008 (Unaudited) and December 31,
      2007</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>4</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Consolidated Condensed Statements of Operations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>(Unaudited) &#150; Fiscal Quarters Ended
      September 27, 2008 and</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>September 29, 2007</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>6</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Consolidated Condensed Statements of Operations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>(Unaudited) &#150; Nine Fiscal Months Ended September
      27, 2008 and</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>September 29, 2007</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>7</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Consolidated Condensed Statements of Cash Flows</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>(Unaudited) &#150; Nine Fiscal Months Ended September
      27, 2008 and</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>September 29, 2007</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>8</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Notes to Consolidated Condensed Financial Statements</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>(Unaudited)</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>9</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 2.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Management&#146;s Discussion and Analysis of Financial</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Condition and Results of Operations</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>38</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 3.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Quantitative and Qualitative Disclosures About Market Risk</FONT>
    </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>59</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 4.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Controls and Procedures</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>59</FONT> </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>PART II.</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><B><FONT face=serif size=2>OTHER INFORMATION</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 1.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Legal Proceedings</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>60</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 1A.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Risk Factors</FONT>&nbsp; </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>60</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 2.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Unregistered Sales of Equity Securities and Use of Proceeds</FONT>
    </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>60</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 3.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Defaults Upon Senior Securities</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>60</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 4.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Submission of Matters to a Vote of Security Holders</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>60</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 5.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Other Information</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>60</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0><FONT face=serif size=2>Item 6.</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Exhibits</FONT> </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>61</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="82%">&nbsp;</TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><B><FONT face=serif size=2>SIGNATURES</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="8%" bgColor=#c0c0c0><FONT face=serif size=2>62</FONT> </TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>3 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=center><B><FONT face=serif size=2>PART I - FINANCIAL
INFORMATION</FONT></B></P>
<P align=justify><B><U><FONT face=serif size=2>Item 1</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><B><U><FONT face=serif size=2>Financial
Statements</FONT></U></B></P>
<P align=justify><B><FONT face=serif size=2>VISHAY INTERTECHNOLOGY, INC.
<BR></FONT></B><FONT face=serif size=2>Consolidated Condensed Balance
Sheets<BR></FONT><I><FONT face=serif size=2>(In thousands)</FONT></I></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>September 27,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>December 31,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><B><FONT face=serif size=2>Assets</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>(Unaudited)</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="3%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Current assets:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Cash and cash equivalents</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>312,021</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>537,295</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Accounts receivable, net</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>449,162</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>441,772</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Inventories:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Finished goods</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>162,411</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>159,713</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Work in process</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>240,394</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>224,667</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Raw materials</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>159,242</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>170,329</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Deferred income taxes</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>24,793</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>26,426</FONT>
</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Prepaid expenses and other current
      assets</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>162,762</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>153,988</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Assets held for sale (see Note 2)</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>28,611</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Total current assets</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,510,785</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>1,742,801</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Property and equipment, at cost:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Land</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>101,076</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>101,938</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Buildings and improvements</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>505,395</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>485,342</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Machinery and equipment</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>2,082,847</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>2,001,390</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Construction in progress</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>91,418</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>101,659</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Allowance for depreciation</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>(1,597,549</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>(1,469,331</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,183,187</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>1,220,998</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Goodwill</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>572,257</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>1,676,497</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Other intangible assets, net</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>188,154</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>192,591</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Other assets</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>208,674</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>162,348</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Total assets</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%"><B><FONT face=serif size=2>3,663,057</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%"><FONT face=serif size=2>4,995,235</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD></TR></TABLE>
<P align=justify><B><I><FONT face=serif size=2>Continues on following
page.</FONT></I></B></P>
<P align=center><FONT face=serif size=2>4 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>VISHAY INTERTECHNOLOGY, INC.
<BR></FONT></B><FONT face=serif size=2>Consolidated Condensed Balance Sheets
(continued)<BR></FONT><I><FONT face=serif size=2>(In thousands)</FONT></I><FONT face=serif size=2> </FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>September 27,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>December 31,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>(Unaudited)</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="3%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><B><FONT face=serif size=2>Liabilities and stockholders' equity</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Current
      liabilities:</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Notes payable to banks</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,285</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>30</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Trade accounts payable</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>144,053</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>173,039</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Payroll and related expenses</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>143,260</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>140,879</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Other accrued expenses</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>233,358</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>235,728</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Income taxes</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>38,846</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>34,653</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Current portion of long-term debt</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>25,488</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>1,346</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Liabilities related to assets held for sale (see
      Note 2)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>11,253</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Total current
      liabilities</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>587,290</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>596,928</FONT>
    </TD></TR>
  <TR>
    <TD width="99%" bgColor=#ffffff colSpan=8>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Long-term debt less current portion</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>333,538</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>607,237</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#ffffff><FONT face=serif size=2>Deferred income taxes</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>19,593</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>24,216</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Deferred grant income</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>3,361</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>1,044</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#ffffff><FONT face=serif size=2>Other liabilities</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>127,622</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>122,958</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Accrued pension and other postretirement costs</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>270,455</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>280,713</FONT> </TD></TR>
  <TR>
    <TD width="99%" bgColor=#ffffff colSpan=8>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Minority interest</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>5,414</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>5,364</FONT> </TD></TR>
  <TR>
    <TD width="99%" bgColor=#ffffff colSpan=8>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Stockholders' equity:</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Common stock</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>17,209</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>17,198</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Class B common stock</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,435</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>1,435</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Capital in excess of par value</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>2,255,082</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>2,252,297</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>(Accumulated deficit) retained earnings</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(153,549</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>925,575</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#ffffff>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Accumulated other comprehensive income</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>195,607</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>160,270</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>Total stockholders' equity</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,315,784</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>3,356,775</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#ffffff><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>Total liabilities and stockholders' equity</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff><B><FONT face=serif size=2>$</FONT></B>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>3,663,057</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>4,995,235</FONT>
</TD></TR></TABLE><BR>
<P align=justify><B><I><FONT face=serif size=2>See accompanying
notes.</FONT></I></B></P>
<P align=center><FONT face=serif size=2>5 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>VISHAY INTERTECHNOLOGY,
INC.<BR></FONT></B><FONT face=serif size=2>Consolidated Condensed Statements of
Operations<BR></FONT><I><FONT face=serif size=2>(Unaudited - In thousands,
except earnings (loss) per share)</FONT></I></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="11%" colSpan=7><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>September 27,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>September 29,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Net revenues</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2><B><FONT face=serif>$</FONT></B>&nbsp;</FONT><FONT style="BACKGROUND-COLOR: #c0c0c0" size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>739,092</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$
      </FONT>&nbsp;&nbsp; &nbsp; &nbsp;&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>729,616</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Cost of products
      sold</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>579,591</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>554,816</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Gross profit</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>159,501</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>174,800</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Selling, general, and administrative expenses</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>112,844</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>110,586</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Restructuring
      and severance costs</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>6,849</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>9,920</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Impairment of goodwill and indefinite-lived intangibles</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>357,917</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=2><STRONG>-</STRONG></FONT><FONT size=3> </FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Terminated
      tender offer expenses</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>4,000</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><STRONG><FONT size=2>-</FONT></STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Operating income (loss)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(322,109</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>54,294</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Other income (expense):</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Interest expense</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(4,873</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>(7,441</FONT>
</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Loss on early extinguishment of debt</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(13,601</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=2><STRONG>-</STRONG></FONT><FONT size=3> </FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Other</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>6,853</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>2,279</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(11,621</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(5,162</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Income (loss) from continuing operations before</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>taxes and minority interest</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(333,730</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>49,132</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Income tax expense (benefit)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(21,007</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>11,597</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Minority
      interest</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>144</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>436</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Income (loss) from continuing operations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(312,867</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>37,099</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Loss from discontinued operations, net of tax</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2><STRONG>-</STRONG><FONT size=3> </FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(1,924</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="88%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Net earnings (loss)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(312,867</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>35,175</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Basic earnings (loss) per share:*</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Continuing operations</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(1.68</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0.20</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Discontinued operations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2><STRONG>-</STRONG><FONT size=3> </FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(0.01</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Net earnings (loss)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(1.68</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0.19</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Diluted earnings (loss) per share:*</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Continuing operations</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(1.68</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0.20</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Discontinued operations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2><STRONG>-</STRONG><FONT size=3> </FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(0.01</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Net earnings (loss)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(1.68</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0.19</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Weighted average shares outstanding - basic</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>186,425</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>186,335</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Weighted average shares outstanding - diluted</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>186,425</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>192,779</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;
</TD></TR></TABLE><BR>
<P align=justify><B><I><FONT face=serif size=2>See accompanying
notes.</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>* May not add due to rounding.
</FONT></P>
<P align=center><FONT face=serif size=2>6 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>VISHAY INTERTECHNOLOGY,
INC.<BR></FONT></B><FONT face=serif size=2>Consolidated Condensed Statements of
Operations<BR></FONT><I><FONT face=serif size=2>(Unaudited - In thousands,
except earnings (loss) per share)</FONT></I></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="11%" colSpan=7><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>September 27,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>September 29,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Net revenues</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2><B><FONT face=serif>$</FONT></B>&nbsp;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,246,769</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2><FONT face=serif>$</FONT>&nbsp;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>2,103,669</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Cost of products
      sold</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>1,735,086</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>1,575,803</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Gross profit</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>511,683</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>527,866</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Selling, general, and administrative expenses</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>352,928</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>329,308</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Restructuring
      and severance costs</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>33,960</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>13,186</FONT>
</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Asset write-downs</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>4,195</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>2,665</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Impairment of
      goodwill and indefinite-lived intangibles</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>1,157,917</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><STRONG><FONT size=2>-</FONT></STRONG>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Terminated tender offer expenses</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>4,000</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><STRONG><FONT size=2>-</FONT></STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Operating income
      (loss)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(1,041,317</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>182,707</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Other income (expense):</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Interest expense</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(17,535</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>(22,039</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Loss
      on early extinguishment of debt</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(13,601</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><STRONG><FONT size=2>-</FONT></STRONG> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Other</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>11,328</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>12,192</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(19,808</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(9,847</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Income (loss) from continuing operations before</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>taxes and minority interest</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(1,061,125</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>172,860</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Income tax expense (benefit)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(25,028</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>42,769</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>Minority
      interest</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>891</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>983</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Income (loss) from continuing operations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(1,036,988</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>129,108</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Loss from discontinued operations, net of tax</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(42,136</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(3,222</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="88%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Net earnings (loss)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(1,079,124</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>125,886</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Basic earnings (loss) per share:*</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Continuing operations</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(5.56</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0.70</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Discontinued operations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(0.23</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(0.02</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net earnings (loss)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(5.79</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0.68</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Diluted earnings (loss) per share:*</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Continuing operations</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(5.56</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0.67</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Discontinued operations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(0.23</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(0.02</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Net earnings (loss)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(5.79</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>0.66</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Weighted average shares outstanding - basic</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>186,380</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>185,408</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>Weighted average shares outstanding - diluted</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>186,380</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>200,062</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;
</TD></TR></TABLE><BR>
<P align=justify><B><I><FONT face=serif size=2>See accompanying
notes.</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>* May not add due to
rounding.</FONT><FONT face=serif> </FONT></P>
<P align=center><FONT face=serif size=2>7 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>VISHAY INTERTECHNOLOGY,
INC.<BR></FONT></B><FONT face=serif size=2>Consolidated Condensed Statements of
Cash Flows<BR></FONT><I><FONT face=serif size=2>(Unaudited - In
thousands)</FONT></I></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="11%" colSpan=7><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>September 27,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>September 29,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp; &nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face=serif size=2>Continuing operating activities</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Net earnings
      (loss)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT size=2><B><FONT face=serif>$</FONT></B>&nbsp;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(1,079,124</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT size=2><FONT face=serif>$</FONT>&nbsp;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>125,886</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Adjustments to reconcile net earnings (loss) to</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp; &nbsp;&nbsp;
      <FONT face=serif size=2>net cash provided by continuing operating
      activities:</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Loss on discontinued operations, net of tax</FONT>&nbsp;
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>42,136</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>3,222</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Impairment of goodwill and indefinite-lived
      intangibles, net of tax</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,098,796</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT size=2><STRONG>-</STRONG></FONT><FONT size=3> </FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Depreciation and amortization</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>166,579</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>158,161</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Gain on disposal of property and
      equipment</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(3,217</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(740</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Minority interest in net earnings of consolidated
      subsidiaries</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>891</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>983</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Asset write-downs</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>4,195</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>2,665</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Inventory write-offs for obsolescence</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>22,805</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>19,603</FONT>
</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Loss on early extinguishment of debt</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>13,601</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><STRONG><FONT size=2>-</FONT></STRONG> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Deferred grant income</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(1,166</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>(4,023</FONT>
</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Other</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,569</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(5,225</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Changes in operating assets and
      liabilities,</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>net of effects of businesses acquired</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>(76,826</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>(90,172</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash provided by continuing operating activities</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>191,239</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>210,360</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face=serif size=2>Continuing investing activities</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Purchase of
      property and equipment</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(99,074</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>(107,779</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Proceeds from sale of property and equipment</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>10,894</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>3,040</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Purchase of
      businesses, net of cash acquired</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>(73,924</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>(331,815</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Proceeds from sale of businesses</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>18,667</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Other investing
      activities</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>450</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><FONT face=serif size=2>(1,862</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash used in continuing investing activities</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(161,654</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(419,749</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="87%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="3%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face=serif size=2>Continuing financing activities</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#ffffff><FONT face=serif size=2>Principal payments on long-term debt and capital lease
      obligations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>(501,701</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>(1,318</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Proceeds of long-term debt, net of issuance costs</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>123,379</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><STRONG><FONT size=2>-</FONT></STRONG> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#ffffff><FONT face=serif size=2>Net proceeds (repayment) of revolving credit lines</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>125,000</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>(2,683</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Net changes in short-term borrowings</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,570</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>2,831</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#ffffff><FONT face=serif size=2>Proceeds from stock options exercised</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>172</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>20,671</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash (used in) provided by continuing financing
      activities</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(251,580</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>19,501</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#ffffff><FONT face=serif size=2>Effect of exchange rate changes on cash and cash equivalents</FONT>
    </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>5,673</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>16,576</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Net decrease in cash and cash equivalents</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>from continuing activities</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(216,322</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(173,312</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#ffffff><FONT face=serif size=2>Net cash used by discontinued operating activities</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>(10,382</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>(19,936</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash provided (used) by discontinued investing
      activities</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,430</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(1,341</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#ffffff><FONT face=serif size=2>Net cash used by discontinued financing activities</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#ffffff><STRONG><FONT size=2>-</FONT></STRONG> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Net cash used by discontinued operations</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>(8,952</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>(21,277</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#ffffff><FONT face=serif size=2>Net decrease in cash and cash equivalents</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>(225,274</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>(194,589</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Cash and cash equivalents at beginning of period</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>537,295</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>671,586</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#ffffff><FONT face=serif size=2>Cash and cash equivalents at end of period</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#ffffff><B><FONT face=serif size=2>312,021</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#ffffff><FONT face=serif size=2>476,997</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#ffffff>&nbsp; </TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>8 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>Vishay Intertechnology,
Inc.<BR></FONT></B><FONT face=serif size=2>Notes to Consolidated Condensed
Financial Statements<BR></FONT><I><FONT face=serif size=2>(Unaudited)
</FONT></I></P>
<P align=justify><B><U><FONT face=serif size=2>Note 1 &#150; Basis of
Presentation</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>The accompanying unaudited consolidated
condensed financial statements of Vishay Intertechnology, Inc. (&#147;Vishay&#148; or the
&#147;Company&#148;) have been prepared in accordance with the instructions to Form 10-Q
and therefore do not include all information and footnotes necessary for
presentation of financial position, results of operations, and cash flows
required by accounting principles generally accepted in the United States for
complete financial statements. The information furnished reflects all normal
recurring adjustments which are, in the opinion of management, necessary for a
fair summary of the financial position, results of operations, and cash flows
for the interim periods presented. The financial statements should be read in
conjunction with the consolidated financial statements and notes thereto filed
with the Company&#146;s Annual Report on Form 10-K for the year ended December 31,
2007. The results of operations for the nine fiscal months ended September 27,
2008 are not necessarily indicative of the results to be expected for the full
year. </FONT></P>
<P align=justify><FONT face=serif size=2>The Company reports interim financial
information for 13-week periods beginning on a Sunday and ending on a Saturday,
except for the first quarter, which always begins on January 1, and the fourth
quarter, which always ends on December 31. The four fiscal quarters in 2008 end
on March 29, 2008, June 28, 2008, September 27, 2008, and December 31, 2008. The
four fiscal quarters in 2007 ended on March 31, 2007, June 30, 2007, September
29, 2007, and December 31, 2007, respectively.</FONT></P>
<P align=justify><FONT face=serif size=2>Certain prior year amounts have been
reclassified to conform to the current financial statement presentation.
</FONT></P>
<P align=center><FONT face=serif size=2>9 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Note 2 &#150; Acquisition and
Divestiture Activities</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>As part of its growth strategy, the
Company seeks to expand through the acquisition of other manufacturers of
electronic components that have established positions in major markets,
reputations for product quality and reliability, and product lines with which
the Company has substantial marketing and technical expertise. </FONT></P>
<P align=justify><FONT face=serif size=2>Vishay made three acquisitions during
the third quarter of 2008, as further described below. Also see Note 13.
</FONT></P>
<P align=justify><FONT face=serif size=2>As further described below, the Company
acquired the Power Control Systems (&#147;PCS&#148;) business of International Rectifier
Corporation on April 1, 2007. Vishay sold the automotive module and subsystems
business acquired as part of the PCS business on April 7, 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>The Company also acquired PM Group PLC
(&#147;PM Group&#148;) in April 2007. Concurrent with the acquisition of PM Group, Vishay
sold PM Group&#146;s electrical contracting business. </FONT></P>
<P align=justify><FONT face=serif size=2>During the first quarter of 2007, the
Company sold two non-core product lines and recognized a gain of $1.8 million in
operating income. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>2008 Acquisitions
</FONT></I></B></P>
<P align=justify><I><U><FONT face=serif size=2>Acquisition of Partner&#146;s Interest
in India Joint Venture</FONT></U></I><I><FONT face=serif size=2> </FONT></I></P>
<P align=justify><FONT face=serif size=2>On June 30, 2008, the Company acquired
its partner&#146;s interest in a joint venture in India for approximately $9.6
million in cash, in the Company&#146;s fiscal third quarter. Vishay previously owned
49% of this entity, which is engaged in the manufacture and distribution of
transducers. The entity has been renamed Vishay Transducers India, Ltd.
</FONT></P>
<P align=justify><FONT face=serif size=2>As a non-controlled investment, Vishay
Transducers India, Ltd. had been accounted for using the equity basis. Effective
June 30, 2008, Vishay began reporting this entity as a consolidated subsidiary,
included in the Passive Components segment. </FONT></P>
<P align=justify><FONT face=serif size=2>The cost to acquire the partner&#146;s 51%
interest has been allocated on a pro rata basis to assets acquired and
liabilities assumed based on their fair values, with the excess being allocated
to goodwill. As a result of this transaction, the Company recorded goodwill of
$3.2 million. The goodwill associated with this transaction is not deductible
for income tax purposes. The Company will test the goodwill for impairment at
least annually in accordance with U.S. generally accepted accounting principles.
</FONT></P>
<P align=justify><FONT face=serif size=2>The preliminary purchase price
allocation is pending finalization of appraisals for property and equipment and
intangible assets. There can be no assurance that the estimated amounts will
represent the final purchase price allocation. </FONT></P>
<P align=justify><I><U><FONT face=serif size=2>Acquisition of Powertron
GmbH</FONT></U></I><I><FONT face=serif size=2> </FONT></I></P>
<P align=justify><FONT face=serif size=2>On July 23, 2008, the Company acquired
Powertron GmbH, a manufacturer of specialty precision resistors, for
approximately $14.3 million, including the repayment of certain debt of
Powertron. For financial reporting purposes, the results of operations for
Powertron have been included in the Passive Components segment from July 23,
2008. After allocating the purchase price to the assets acquired and liabilities
assumed based on a preliminary evaluation of their fair values, the Company
recorded goodwill of $9.3 million related to this acquisition. The goodwill
associated with this transaction is not deductible for income tax purposes. The
Company will test the goodwill for impairment at least annually in accordance
with U.S. generally accepted accounting principles. </FONT></P>
<P align=justify><FONT face=serif size=2>The preliminary purchase price
allocation is pending finalization of appraisals for property and equipment and
intangible assets. There can be no assurance that the estimated amounts will
represent the final purchase price allocation. </FONT></P>
<P align=center><FONT face=serif size=2>10 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><I><U><FONT face=serif size=2>Acquisition of Wet Tantalum
Business</FONT></U></I><I><FONT face=serif size=2> </FONT></I></P>
<P align=justify><FONT face=serif size=2>On September 15, 2008, the Company
acquired the wet tantalum capacitor business of KEMET Corporation for $35.2
million and other consideration in the form of a three-year term loan of $15
million. For financial reporting purposes, the results of operations for the wet
tantalum business have been included in the Passive Components segment from
September 15, 2008. After allocating the purchase price to the assets acquired
and liabilities assumed based on a preliminary evaluation of their fair values,
the Company recorded goodwill of $18.8 million related to this acquisition. The
goodwill associated with this transaction is not deductible for income tax
purposes. The Company will test the goodwill for impairment at least annually in
accordance with U.S. generally accepted accounting principles (see Note 3).
</FONT></P>
<P align=justify><FONT face=serif size=2>The preliminary purchase price
allocation is pending finalization of appraisals for property and equipment and
intangible assets. There can be no assurance that the estimated amounts will
represent the final purchase price allocation. </FONT></P>
<P align=justify><FONT face=serif size=2>Terms of the secured loan of $15
million to KEMET from Vishay include a three-year non-amortizing maturity, an
interest rate of LIBOR plus four percent, and security consisting of accounts
receivable. The loan receivable balance is recorded in other noncurrent assets.
</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>2007 Acquisition of Power Control
Systems Business </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>On April 1, 2007, Vishay completed its
acquisition of the PCS business of International Rectifier Corporation for
approximately $285.6 million, net of cash acquired. The transaction was funded
using cash on-hand. The final purchase price is pending the resolution of a net
working capital adjustment dispute as of the date of acquisition. Resolution of
the net working capital adjustment dispute was deferred until International
Rectifier could complete an internal investigation of its accounting practices.
International Rectifier completed this investigation and reported its restated
financial results on August 1, 2008. Resumption of negotiations to resolve the
net working capital adjustment dispute did not occur during the third quarter
due to Vishay&#146;s tender offer to acquire all outstanding shares of International
Rectifier (see Note 13).</FONT></P>
<P align=justify><FONT face=serif size=2>The PCS business product lines
include</FONT><B><FONT face=serif size=2> </FONT></B><FONT face=serif size=2>planar high-voltage MOSFETs, Schottky diodes, diode rectifiers,
fast-recovery diodes, high-power diodes and thyristors, power modules (a
combination of power diodes, thyristors, MOSFETs, and IGBTs), and automotive
modules and subsystems. Vishay sold the automotive module and subsystems
business acquired as part of the PCS business on April 7, 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>Vishay acquired all of the outstanding
stock of six International Rectifier subsidiaries engaged in the conduct of the
PCS business. Vishay also acquired certain assets of International Rectifier
used in connection with the PCS business, principally intellectual property,
inventory, and equipment.</FONT></P>
<P align=justify><FONT face=serif size=2>The main purchase agreement provides
that, for a period of seven years after the closing, International Rectifier and
its affiliates will not engage in the PCS business anywhere in the world,
subject to certain specified product exceptions.</FONT><FONT face=serif>
</FONT></P>
<P align=justify><FONT face=serif size=2>At the closing of the transaction,
Vishay and International Rectifier entered into four license agreements.
Pursuant to these agreements, International Rectifier is licensing to Vishay
certain of its patents and technology related to the PCS business on a
non-exclusive, perpetual and royalty-free basis; International Rectifier is
licensing to Vishay certain of its trademarks for specified periods of up to two
years after closing; and Vishay is licensing back to International Rectifier
patents and technology relating to the PCS business purchased by Vishay in the
transaction, on a non-exclusive, perpetual and royalty-free basis. International
Rectifier&#146;s use of the license back is subject to the non-competition
arrangements described above.</FONT></P>
<P align=justify><FONT face=serif size=2>Vishay and International Rectifier also
entered into transition services and supply agreements, including a transition
products services agreement relating to the provision by International Rectifier
to Vishay of certain wafer and packaging services; an IGBT auto die supply
agreement relating to the provision of certain die and other products by
International Rectifier to Vishay; and a transition buyback agreement relating
to the provision of certain die products by Vishay to International
Rectifier.</FONT></P>
<P align=justify><FONT face=serif size=2>The results of operations of the PCS
business are included in the results of the Semiconductors segment from April 1,
2007, excluding the automotive modules and subsystems business unit, which is
reported as discontinued operations as described below. </FONT></P>
<P align=center><FONT face=serif size=2>11 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The acquisition has been accounted for
under the purchase method of accounting in accordance with U.S. generally
accepted accounting principles. Accordingly, the purchase price has been
preliminarily allocated as follows, to the assets acquired and liabilities
assumed based on their fair values, with the excess being allocated to goodwill
</FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>:</FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face=serif size=2>Working capital</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>4,272</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>Property and
      equipment</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>55,858</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face=serif size=2>Completed technology</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>16,300</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>Customer
      relationships</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>21,900</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face=serif size=2>Tradenames</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,300</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>Other intangible
      assets</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><B><FONT face=serif size=2>2,200</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face=serif size=2>Net assets held for sale</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>4,000</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>Deferred
      taxes</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>(6,500</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face=serif size=2>Total identified assets and liabilities</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>100,330</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=4>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face=serif size=2>Purchase price, net of cash acquired</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>282,652</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>Direct costs of
      acquisition</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="3%"><B><FONT face=serif size=2>2,950</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face=serif size=2>Total purchase price</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>285,602</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=4>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face=serif size=2>Goodwill</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="3%" bgColor=#c0c0c0><B><FONT face=serif size=2>185,272</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The completed technology, customer
relationships, tradenames, and other intangible assets will be amortized over
weighted average useful lives of 10 years, 10 years, 3 years, and 1.5 years,
respectively. </FONT></P>
<P align=justify><FONT face=serif size=2>The goodwill associated with the
transaction has been allocated to the Semiconductors reporting unit. The Company
will test the goodwill for impairment at least annually in accordance with U.S.
generally accepted accounting principles, or more frequently if there are
triggering events (see Note 3). The goodwill associated with this acquisition is
not deductible for income tax purposes.</FONT></P>
<P align=justify><FONT face=serif size=2>In evaluating the acquisition of the
PCS business, the Company focused primarily on the business&#146;s revenues and
customer base, the strategic fit of the business&#146;s product line with the
Company&#146;s existing product offerings, and opportunities for cost reductions and
other synergies, rather than on the business&#146;s tangible assets, such as its
property, equipment, and inventory. As a result, the fair value of the acquired
assets corresponds to a relatively smaller portion of the acquisition price,
with the Company recording a substantial amount of goodwill associated with the
acquisition. </FONT></P>
<P align=justify><FONT face=serif size=2>On April 9, 2007, International
Rectifier announced an internal investigation of accounting irregularities.
While the investigation was on-going, International Rectifier was precluded from
discussing certain matters with Vishay, such as the parties&#146; dispute with
respect to a net working capital adjustment to the acquisition purchase price
and certain tax issues associated with acquired subsidiaries. These matters
could have an impact on the purchase price allocation. </FONT></P>
<P align=justify><FONT face=serif size=2>International Rectifier completed this
investigation and reported its restated financial results on August 1, 2008.
International Rectifier has not yet provided this requested information to
Vishay (see Note 13). Any future changes to the purchase price allocation
related to the acquisition of the PCS business will be directly related to this
information. Until such information is obtained, the purchase price allocation
is still considered to be &#147;preliminary.&#148; There can be no assurance that the
estimated amounts will represent the final purchase price allocation.</FONT></P>
<P align=center><FONT face=serif size=2>12 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Sale of Automotive Modules and
Subsystems Business </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>On April 7, 2008, Vishay sold the
automotive modules and subsystems business unit (&#147;ASBU&#148;) to a private equity
firm. ASBU was originally acquired by Vishay as part of the April 1, 2007
acquisition of International Rectifier&#146;s Power Control Systems business. Vishay
determined that ASBU would not satisfactorily complement Vishay&#146;s
operations.</FONT></P>
<P align=justify><FONT face=serif size=2>During Vishay&#146;s period of ownership of
ASBU, the assets and liabilities of ASBU were separately reported in the
consolidated condensed balance sheet as &#147;assets held for sale&#148; and &#147;liabilities
related to assets held for sale.&#148; Long-lived assets held for sale were not
depreciated or amortized. The Company allocated no goodwill to ASBU in the
purchase accounting for the PCS business. </FONT></P>
<P align=justify><FONT face=serif size=2>Financial results of discontinued
operations for the fiscal quarter and nine fiscal months ended September 27,
2008 and September 29, 2007 are as follows </FONT><I><FONT face=serif size=2>(in
thousands)</FONT></I><FONT face=serif size=2>:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="57%">&nbsp; </TD>
    <TD noWrap align=center width="20%" colSpan=6><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="21%" colSpan=7><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=2><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="10%" colSpan=3><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="10%" colSpan=3><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="10%" colSpan=3><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%" bgColor=#c0c0c0><FONT face=serif size=2>Net revenues</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2><STRONG>-</STRONG></FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2><FONT style="BACKGROUND-COLOR: #c0c0c0" size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>14,237</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>10,995</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2><FONT style="BACKGROUND-COLOR: #c0c0c0" size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>29,558</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=15>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%" bgColor=#c0c0c0><FONT face=serif size=2>Loss before income taxes</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><STRONG><FONT face=serif size=2>-</FONT></STRONG> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>(2,057</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2><FONT style="BACKGROUND-COLOR: #c0c0c0" size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT><STRONG>(38,224</STRONG></FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>(3,919</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%"><FONT face=serif size=2>Tax expense
      (benefit)</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><STRONG><FONT face=serif size=2>-</FONT></STRONG> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>(133</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><B><FONT face=serif size=2>3,912</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>(697</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%" bgColor=#c0c0c0><FONT face=serif size=2>Loss from discontinued</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="57%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>operations, net of tax</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>(1,924</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>(42,136</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>(3,222</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The loss before income taxes includes
an impairment charge of $32.3 million, recorded in the first quarter of 2008, to
reduce the carrying value of the net assets held for sale to the proceeds
received on April 7, 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>The Company retained responsibility for
the collection of certain customer accounts receivable on behalf of the buyer.
These amounts are being remitted to the buyer upon collection. The Company also
retained responsibility for certain severance costs and lease termination costs
associated with ASBU. </FONT></P>
<P align=justify><FONT face=serif size=2>The selling price for ASBU is subject
to a working capital adjustment which has not been finalized. </FONT></P>
<P align=justify><FONT face=serif size=2>As additional consideration for the
sale, Vishay is eligible to receive a portion of the proceeds of certain
liquidity events involving ASBU, after the private equity firm has received
distributions of its invested capital plus a specified return and after certain
other payments. Given the uncertainties of this possible future receipt of
proceeds, Vishay has ascribed zero value to this contingent consideration in
estimating the impairment charge. Any consideration received upon future sale of
ASBU by the private equity firm will be recorded as a gain on disposal of
discontinued operations in future periods. </FONT></P>
<P align=center><FONT face=serif size=2>13 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Pro Forma Results
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>The unaudited pro forma results would
have been as follows, assuming the acquisitions of the PCS business and PM Group
had occurred as of January 1, 2007 </FONT><I><FONT face=serif size=2>(in
thousands, except per share amounts): </FONT></I></P>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; </TD>
    <TD noWrap align=center width="14%" colSpan=3><B><FONT face=serif size=2>Nine fiscal months</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; </TD>
    <TD noWrap align=center width="14%" colSpan=3><B><FONT face=serif size=2>ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=3><B><FONT face=serif size=2>September 29, 2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Pro forma net revenues</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%" bgColor=#c0c0c0>&nbsp; &nbsp; &nbsp; &nbsp; <FONT face=serif size=2>2,175,554</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><FONT face=serif size=2>Pro forma income
      from continuing</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="12%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>operations</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>135,811</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Pro forma loss from discontinued</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="12%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>operations</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="12%" bgColor=#c0c0c0><FONT face=serif size=2>(4,069</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><FONT face=serif size=2>Pro forma net
      earnings</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><FONT face=serif size=2>131,742</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Pro forma per share - basic:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="12%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Income from continuing
      operations</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>0.73</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Loss from discontinued
      operations</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%" bgColor=#c0c0c0><FONT face=serif size=2>(0.02</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Net earnings</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>0.71</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2>Pro forma per share - diluted:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="12%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Income from continuing
      operations</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>0.71</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Loss from discontinued
      operations</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%" bgColor=#c0c0c0><FONT face=serif size=2>(0.02</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="85%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT>Net earnings</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>0.69</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The pro forma information reflects
adjustments to depreciation based on the fair value of property and equipment
acquired, adjustments to amortization based on the fair value of intangible
assets, and tax related effects.</FONT></P>
<P align=justify><FONT face=serif size=2>The unaudited pro forma results are not
necessarily indicative of the results that would have been attained had the
acquisitions occurred at the beginning of the period presented. </FONT></P>
<P align=justify><FONT face=serif size=2>Had the 2008 acquisitions occurred as
of the beginning of the periods presented in these consolidated condensed
financial statements, the pro forma statements of operations would not be
materially different than the consolidated statements of operations presented.
</FONT></P>
<P align=center><FONT face=serif size=2>14 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><U><B><FONT face=serif size=2>Note 3 &#150; Goodwill and Intangible
Assets</FONT></B><B><FONT face=serif size=2> </FONT></B></U></P>
<P align=justify><FONT face=serif size=2>Goodwill represents the excess of the
cost of businesses acquired over the fair value of the net assets acquired at
the date of acquisition. Goodwill is not amortized but rather tested for
impairment at least annually. The Company performs its annual impairment test as
of the first day of the fiscal fourth quarter. These impairment tests must be
performed more frequently if there are triggering events. </FONT></P>
<P align=justify><FONT face=serif size=2>In light of a sustained decline in
market capitalization for Vishay and its peer group companies, and other
factors, Vishay determined that an interim impairment test was necessary as of
the end of the second and third fiscal quarters of 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>Statement of Financial Accounting
Standards (&#147;SFAS&#148;) No. 142, </FONT><I><FONT face=serif size=2>Goodwill and Other
Intangible Assets</FONT></I><FONT face=serif size=2>, prescribes a two-step
method for determining goodwill impairment. In the first step, the Company
determines the fair value of the reporting unit and compares that fair value to
the net book value of the reporting unit. Since the adoption of SFAS No. 142 in
2002, the Company has applied a comparable companies market multiple approach to
determine the fair value of its reporting units for step one of the SFAS No. 142
impairment test. The Company also utilized other valuation techniques, including
a discounted cash flow analysis, to evaluate the reasonableness of the fair
value determined using the market multiple approach. </FONT></P>
<P align=justify><FONT face=serif size=2>Passive Components segment goodwill is
allocated to two reporting units for SFAS No. 142 evaluation purposes, namely
Other Passives and Measurements Group. The Semiconductors segment represents a
single reporting unit for SFAS No. 142 evaluation purposes.</FONT></P>
<P align=justify><FONT face=serif size=2>After completing step one of the
impairment test as of June 28, 2008, the Company determined that the estimated
fair value of its Semiconductors and Other Passives reporting units was less
than the net book value of those reporting units, requiring the completion of
the second step of the impairment test. The estimated fair value of the
Measurements Group reporting unit was greater than the net book value of that
unit, and accordingly, no second step was required for the Measurement Group
reporting unit.</FONT></P>
<P align=justify><FONT face=serif size=2>To measure the amount of the
impairment, SFAS No. 142 prescribes that the Company determine the implied fair
value of goodwill in the same manner as if the Company had acquired those
business units. Specifically, the Company must allocate the fair value of the
reporting unit to all of the assets of that unit, including any unrecognized
intangible assets, in a hypothetical calculation that would yield the implied
fair value of goodwill. The impairment loss is measured as the difference
between the book value of the goodwill and the implied fair value of the
goodwill computed in step two. </FONT></P>
<P align=justify><FONT face=serif size=2>Upon completion of a preliminary step
two analysis, the Company recorded its best estimate of the impairment loss as
of June 28, 2008, as permitted by SFAS No. 142 when an impairment indicator
arises toward the end of an interim reporting period. This estimate was refined
during the third quarter of 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>Given the further deterioration of
market conditions, an additional impairment test was performed as of September
27, 2008. After completing step one of the impairment test as of September 27,
2008, the Company determined that the estimated fair value of its Other Passives
reporting unit was less than the net book value of this reporting unit. This
required the completion of the second step of the impairment test. The estimated
fair value of the Semiconductors and Measurements Group reporting units was
greater than the net book value of the respective reporting units as of
September 27, 2008, and accordingly, no second step was required for the
Semiconductors and Measurement Group reporting units at September 27, 2008.
</FONT></P>
<P align=justify><FONT face=serif size=2>As a result of these impairment tests,
the Company recorded goodwill impairment charges, as follows </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="68%">&nbsp; </TD>
    <TD noWrap align=center width="16%" colSpan=2><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=2><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="16%" colSpan=2><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="15%" colSpan=2><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Semiconductors</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="15%" bgColor=#c0c0c0><B><FONT face=serif size=2>20,000</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0><B><FONT face=serif size=2>570,000</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Other
      Passives</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="15%"><B><FONT face=serif size=2>310,917</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="14%"><B><FONT face=serif size=2>560,917</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Total</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="15%" bgColor=#c0c0c0><B><FONT face=serif size=2>330,917</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="14%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,130,917</FONT></B>
  </TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>15 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The third quarter impairment loss is
based on a preliminary step two analysis prepared as of September 27, 2008,
which is subject to completion in the fourth quarter of 2008. The completion of
this analysis may result in the recognition of an additional impairment charge
in the fourth quarter of 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>As a result of the analysis described
above, the Company&#146;s goodwill associated with its Other Passives and
Semiconductors reporting units was recorded at fair value. In accordance with
FASB Staff Position No. 157-2</FONT><I><FONT face=serif size=2>, Effective Date
of FASB Statement No. 157</FONT></I><FONT face=serif size=2>, the Company has
not applied SFAS No. 157 to the determination of the fair value of these assets
(see Note 14). However, the provisions of SFAS No. 157 were applied to the
determination of the fair value of financial assets and financial liabilities
that were part of the SFAS No. 142 step two analysis.</FONT></P>
<P align=justify><FONT face=serif size=2>The determination of the fair value of
the reporting units and the allocation of that value to individual assets and
liabilities within those reporting units requires the Company to make
significant estimates and assumptions. These estimates and assumptions primarily
include, but are not limited to: the selection of appropriate peer group
companies; control premiums appropriate for acquisitions in the industries in
which the Company competes; the discount rate; terminal growth rates; and
forecasts of revenue, operating income, depreciation and amortization, and
capital expenditures. The allocation requires several analyses to determine fair
value of assets and liabilities including, among others, completed technology,
tradenames, in-process research and development, customer relationships, and
certain property and equipment (valued at replacement costs). </FONT></P>
<P align=justify><FONT face=serif size=2>Due to the inherent uncertainty
involved in making these estimates, actual financial results could differ from
those estimates. Changes in assumptions concerning future financial results or
other underlying assumptions would have a significant impact on either the fair
value of the reporting unit or the amount of the goodwill impairment
charge.</FONT></P>
<P align=justify><FONT face=serif size=2>The goodwill impairment charge is
noncash in nature and does not affect Vishay&#146;s liquidity, cash flows from
operating activities, or debt covenants, and will not have a material impact on
future operations. </FONT></P>
<P align=justify><FONT face=serif size=2>The changes in the carrying amounts of
goodwill by segment for the nine fiscal months ended September 27, 2008 were as
follows</FONT><I><FONT face=serif size=2> (in thousands):</FONT></I><FONT face=serif> </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="61%">&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="10%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=2>Passive</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="10%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="61%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center width="12%" colSpan=3><B><FONT face=serif size=2>Semiconductors</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=2>Components</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=2>Total</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="61%" bgColor=#c0c0c0><FONT face=serif size=2>Balance at December 31, 2007</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,057,910</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><B><FONT face=serif size=2>618,587</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,676,497</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="61%"><FONT face=serif size=2>Goodwill
      acquired during the year</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="10%"><B><FONT face=serif size=2>-</FONT></B>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="10%"><B><FONT face=serif size=2>31,331</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="10%"><B><FONT face=serif size=2>31,331</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="61%" bgColor=#c0c0c0><FONT face=serif size=2>Purchase price allocation adjustments</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><B><FONT face=serif size=2>(13,220</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><B><FONT face=serif size=2>(13,220</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="61%"><FONT face=serif size=2>Impairment
      charges</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="10%"><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; (570,000</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="10%"><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; (560,917</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="10%"><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; (1,130,917</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="61%" bgColor=#c0c0c0><FONT face=serif size=2>Currency translation adjustments</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="10%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,747</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="10%" bgColor=#c0c0c0><B><FONT face=serif size=2>6,819</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="10%" bgColor=#c0c0c0><B><FONT face=serif size=2>8,566</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="61%"><FONT face=serif size=2>Balance at
      September 27, 2008</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="10%"><B><FONT face=serif size=2>476,437</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="10%"><B><FONT face=serif size=2>95,820</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="10%"><B><FONT face=serif size=2>572,257</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>As described above, Passive Components
segment goodwill is allocated to the Other Passives and Measurements Group
reporting units for SFAS No. 142 evaluation purposes. Goodwill allocated to the
Other Passives reporting unit at September 27, 2008 and December 31, 2007 was
zero and $533,199,000, respectively. Goodwill allocated to the Measurements
Group reporting unit at September 27, 2008 and December 31, 2007 was $95,820,000
and $85,389,000, respectively. </FONT></P>
<P align=justify><FONT face=serif size=2>Purchase price allocation adjustments
recorded in 2008 are attributable to revisions of the purchase accounting for
the 2007 acquisition of the PCS business. </FONT><FONT face=serif></FONT></P>
<P align=center><FONT face=serif size=2>16 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Prior to completing the interim
assessment of goodwill for impairment during the second and third quarters of
2008, the Company performed a recoverability test of certain long-lived assets
in accordance with SFAS No. 144, </FONT><I><FONT face=serif size=2>Accounting
for the Impairment or Disposal of Long-Lived Assets,</FONT></I><FONT face=serif size=2> and certain indefinite-lived intangible assets in accordance with SFAS
No. 142. As a result of those assessments, the Company recorded impairment
charges totaling $27 million during the third quarter of 2008 related to
indefinite-lived intangible assets (certain tradenames), allocated $12 million
to the Passive Components segment and $15 million to the Semiconductors segment.
The Company will amortize the remaining balances of these intangible assets,
aggregating approximately $35.4 million, over a ten-year life. </FONT></P>
<P align=justify><FONT face=serif size=2>The fair value of the tradenames was
measured as the discounted cash flow savings realized from owning such
tradenames and not having to pay a royalty for their use. </FONT></P>
<P align=justify><FONT face=serif size=2>As part of this analysis, the Company
determined that its Siliconix tradenames, with a carrying value of approximately
$20.4 million, were not impaired and will continue to be reported as
indefinite-lived intangible assets. </FONT></P>
<P align=justify><FONT face=serif size=2>Other intangible assets consist of the
following </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="80%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp; </TD>
    <TD noWrap align=center width="10%" colSpan=3><B><FONT face=serif size=2>September 27,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="10%" colSpan=3><B><FONT face=serif size=2>December 31,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="10%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="10%" colSpan=3><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=serif size=2>Intangible Assets Subject to Amortization</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>(Definite-lived):</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Patents and acquired technology</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="8%"><B><FONT face=serif size=2>119,544</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>115,171</FONT>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Capitalized software</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>53,684</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>47,375</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Customer relationships</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><B><FONT face=serif size=2>60,312</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>37,169</FONT>
</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Tradenames</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>40,041</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>4,311</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Non-competition agreements</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><B><FONT face=serif size=2>14,500</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>6,225</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Other</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,400</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>2,000</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><B><FONT face=serif size=2>290,481</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>212,251</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Accumulated amortization:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Patents and acquired technology</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><B><FONT face=serif size=2>(64,664</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>(55,952</FONT>
    </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Capitalized software</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>(40,644</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>(35,714</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Customer relationships</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="8%"><B><FONT face=serif size=2>(10,958</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>(6,876</FONT>
</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Tradenames</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>(2,066</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>(970</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Non-competition agreements</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><B><FONT face=serif size=2>(2,239</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>(1,427</FONT>
</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Other</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>(2,115</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>(1,000</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><B><FONT face=serif size=2>(122,686</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>(101,939</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Net Intangible Assets Subject to
      Amortization</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>167,795</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>110,312</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=8>&nbsp;&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=serif size=2>Intangible Assets Not Subject to Amortization</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>(Indefinite-lived):</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Tradenames</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><B><FONT face=serif size=2>20,359</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>82,279</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="79%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>188,154</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>192,591</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>17 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Note 4 &#150; Restructuring and
Severance Costs and Related Asset Write-Downs</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>Restructuring and severance costs
reflect the cost reduction programs currently being implemented by the Company.
These include the closing of facilities and the termination of employees.
Restructuring and severance costs include onetime exit costs recognized pursuant
to SFAS No. 146, </FONT><I><FONT face=serif size=2>Accounting for Costs
Associated with Exit or Disposal Activities</FONT></I><FONT face=serif size=2>,
severance benefits pursuant to an on-going benefit arrangement recognized
pursuant to SFAS No. 112, </FONT><I><FONT face=serif size=2>Employers&#146;
Accounting for Postemployment Benefits, </FONT></I><FONT face=serif size=2>and
related pension curtailment and settlement charges recognized pursuant to SFAS
No. 88, </FONT><I><FONT face=serif size=2>Employers&#146; Accounting for Settlements
and Curtailments of Defined Benefit Pension Plans and for Termination Benefits.
</FONT></I><B><I><FONT face=serif size=2></FONT></I></B><FONT face=serif size=2>Severance costs also include executive severance and charges for the fair
value of stock options of certain former employees which were modified such that
they did not expire at termination. Restructuring costs are expensed during the
period in which the Company determines it will incur those costs and all
requirements of accrual are met. Because these costs are recorded based upon
estimates, actual expenditures for the restructuring activities may differ from
the initially recorded costs. If the initial estimates are too low or too high,
the Company could be required either to record additional expenses in future
periods or to reverse part of the previously recorded charges. Asset write-downs
are principally related to buildings and equipment that will not be used
subsequent to the completion of restructuring plans presently being implemented,
and cannot be sold for amounts in excess of carrying value.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Third Quarter 2008
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>The Company recorded restructuring and
severance costs of $6,849,000 for the third quarter of 2008. Employee
termination costs were $5,819,000, covering technical, production,
administrative, and support employees located in Austria, Belgium, Brazil,
Germany, Hungary, Ireland, the Netherlands, Portugal, and the United States.
Severance costs for the third quarter of 2008 also include executive severance
(see Note 10). The Company also incurred $1,030,000 of other exit costs during
the quarter, principally related to the closure of a facility in Germany. The
restructuring and severance costs were incurred as part of the continuing cost
reduction programs currently being implemented by the Company.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Nine Fiscal Months Ended
September 27, 2008 </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>The Company recorded restructuring and
severance costs of $33,960,000 for the nine fiscal months ended September 27,
2008. Employee termination costs were $30,770,000, covering technical,
production, administrative, and support employees located in Austria, Belgium,
Brazil, the People&#146;s Republic of China, France, Germany, Hungary, Ireland,
Korea, the Netherlands, and the United States. Severance costs for the third
quarter of 2008 also include executive severance (see Note 10). The Company also
incurred $3,190,000 of other exit costs, principally related to the closures of
facilities in Brazil and Germany. The restructuring and severance costs were
incurred as part of the continuing cost reduction programs currently being
implemented by the Company.</FONT></P>
<P align=justify><FONT face=serif size=2>As a result of the decision to close
its facility in Brazil, the Company completed a long-lived asset impairment
analysis during the first quarter of 2008 and determined that various fixed
assets and intangible assets were impaired. The Company recorded fixed asset
write-downs of $3,419,000 and intangible asset write-downs of
$776,000.</FONT></P>
<P align=justify><FONT face=serif size=2>The following table summarizes activity
to date related to restructuring programs initiated in 2008</FONT><I><FONT face=serif size=2> (in thousands, except for number of
employees):</FONT></I><FONT face=serif size=2> </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="64%">&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="7%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="7%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Employees</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%">&nbsp; </TD>
    <TD noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Severance</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Other</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="5%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>to
      be</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Costs</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Exit Costs</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Total</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Terminated</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Restructuring and severance costs</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>30,770</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>3,190</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>33,960</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>601</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Utilized</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT><STRONG>(15,018</STRONG></FONT> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(773</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="5%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2><B>(15,791</B></FONT> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT><STRONG>(530</STRONG></FONT> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%" bgColor=#c0c0c0><FONT face=serif size=2>Foreign currency translation</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>(657</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>(107</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(764</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="64%"><FONT face=serif size=2>Balance at
      September 27, 2008</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%"><B><FONT face=serif size=2>15,095</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT><STRONG>2,310</STRONG></FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>17,405</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%"><B><FONT face=serif size=2>71</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>18 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Most of the accrued restructuring
liability, currently shown in other accrued expenses, is expected to be paid by
December 31, 2008. The payment terms related to these restructuring programs
varies, usually based on local customs and laws. Most severance amounts are paid
in a lump sum at termination, while some payments are structured to be paid in
installments.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Third Quarter 2007
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>The Company recorded restructuring and
severance costs of $9,920,000 for the third quarter of 2007. Employee
termination costs were $8,783,000, covering technical, production,
administrative and support employees located in Belgium, China, France, Germany,
and the United States. The Company also incurred $1,137,000 of other exit costs
during the quarter, principally to consolidate warehouse facilities in the
United States. The restructuring and severance costs were incurred as part of
the continuing cost reduction programs currently being implemented by the
Company.</FONT><FONT face=serif> </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Nine Fiscal Months Ended 2007
</FONT></I></B><FONT face=serif></FONT></P>
<P align=justify><FONT face=serif size=2>The Company recorded restructuring and
severance costs of $13,186,000 for the nine fiscal months ended September 29,
2007. Employee termination costs were $10,604,000, covering technical,
production, administrative and support employees located in Belgium, China,
France, Germany, Hungary, and the United States. The Company also incurred
$2,582,000 of other exit costs, principally to consolidate warehouse facilities
in the United States. The restructuring and severance costs were incurred as
part of the continuing cost reduction programs currently being implemented by
the Company. The Company also recorded an asset write-down of $2,665,000 to
reduce the carrying value of a building to its expected selling price. The
building had been vacated as part of restructuring activities.</FONT><FONT face=serif> </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Year Ended December 31, 2007
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>The Company recorded restructuring and
severance costs during the year ended December 31, 2007 as follows
</FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="80%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp; </TD>
    <TD noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Severance</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Other</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="7%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Costs</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=2><B><FONT face=serif size=2>Exit Costs</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Total</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#c0c0c0><FONT face=serif size=2>Programs initiated in 2007</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>15,432</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,572</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>18,004</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"><FONT face=serif size=2>Changes in
      estimate</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="7%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="7%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>from prior year programs</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><B><FONT face=serif size=2>(3,323</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><B><FONT face=serif size=2>-&nbsp;</FONT></B>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><B><FONT face=serif size=2>(3,323</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B> </TD></TR>
  <TR vAlign=bottom bgColor=#c0c0c0>
    <TD noWrap align=left width="72%"><FONT face=serif size=2>Net
      restructuring and severance costs</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2><B>12,109</B></FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT><STRONG>2,572</STRONG></FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT><STRONG>14,681</STRONG></FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Employee termination costs covered
technical, production, administrative and support employees located in Belgium,
China, France, Germany, Hungary, and the United States. Other exit costs were
principally to consolidate warehouse facilities in the United States. The
restructuring and severance costs were incurred as part of the continuing cost
reduction programs currently being implemented by the Company. The Company also
recorded asset write-downs of $3,869,000 to reduce the carrying value of
buildings. The buildings had been vacated as part of restructuring activities.
Certain of these buildings are held-for-sale and classified as &#147;other assets&#148;.
Others are being leased to third-parties and were reduced to their fair value
based on the present value of future lease receipts. </FONT></P>
<P align=justify><FONT face=serif size=2>Also during the year ended December 31,
2007, the Company sold a building that had been vacated as part of its
restructuring programs and recognized a gain of $3,118,000, which is recorded
within selling, general, and administrative expenses. </FONT></P>
<P align=center><FONT face=serif size=2>19 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The following table summarizes activity
to date related to restructuring programs initiated in 2007</FONT><I><FONT face=serif size=2> (in thousands, except for number of
employees):</FONT></I><FONT face=serif size=2> </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="54%">&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="9%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="9%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="9%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="10%" colSpan=2><B><FONT face=serif size=2>Employees</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%">&nbsp; </TD>
    <TD noWrap align=center width="11%" colSpan=3><B><FONT face=serif size=2>Severance</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="11%" colSpan=3><B><FONT face=serif size=2>Other</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="9%"></TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="10%" colSpan=2><B><FONT face=serif size=2>to be</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="11%" colSpan=3><B><FONT face=serif size=2>Costs</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="11%" colSpan=3><B><FONT face=serif size=2>Exit Costs</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="11%" colSpan=3><B><FONT face=serif size=2>Total</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="10%" colSpan=2><B><FONT face=serif size=2>Terminated</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%" bgColor=#c0c0c0><FONT face=serif size=2>Restructuring and severance costs</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>15,432</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,572</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>18,004</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>326</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%"><FONT face=serif size=2>Utilized</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="9%"><B><FONT face=serif size=2>(2,553</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="9%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT><STRONG>(2,557</STRONG></FONT> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="9%"><B><FONT face=serif size=2>(5,110</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="9%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT><STRONG>(209</STRONG></FONT> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%" bgColor=#c0c0c0><FONT face=serif size=2>Foreign currency translation</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>356</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%" bgColor=#c0c0c0><FONT face=serif size=2><STRONG>-</STRONG></FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>356</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%"><FONT face=serif size=2>Balance at
      December 31, 2007</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="9%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp; </FONT><STRONG>13,235</STRONG></FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="9%"><B><FONT face=serif size=2>15</FONT></B>
    </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>
    </TD>
    <TD noWrap align=right width="9%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2><B>13,250</B></FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="9%"><B><FONT face=serif size=2>117</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%" bgColor=#c0c0c0><FONT face=serif size=2>Utilized</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>(5,684</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>(16</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>(5,700</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>(93</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%"><FONT face=serif size=2>Foreign currency
      translation</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%"><B><FONT face=serif size=2>448</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%"><B><FONT face=serif size=2>1</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%"><B><FONT face=serif size=2>449</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%"><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%" bgColor=#c0c0c0><FONT face=serif size=2>Balance at September 27, 2008</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>7,999</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>7,999</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>24</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Most of the accrued restructuring
liability, currently shown in other accrued expenses, is expected to be paid by
December 31, 2008. The payment terms related to these restructuring programs
varies, usually based on local customs and laws. Most severance amounts are paid
in a lump sum at termination, while some payments are structured to be paid in
installments.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Year Ended December 31, 2006
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>At December 31, 2007, approximately
$2.0 million of costs were accrued related to programs initiated in 2006. Most
of the remaining accrued restructuring liability for plans initiated in 2006 was
paid during the second quarter of 2008.</FONT><B><FONT face=serif size=2>
</FONT></B></P>
<P align=center><FONT face=serif size=2>20 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Note 5 &#150; Income
Taxes</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>The provision for income taxes consists
of provisions for federal, state, and foreign income taxes. The effective tax
rates for the periods ended September 27, 2008 and September 29, 2007 reflect
the Company&#146;s expected tax rate on reported income from continuing operations
before income tax and tax adjustments. The Company operates in an international
environment with significant operations in various locations outside the United
States. Accordingly, the consolidated income tax rate is a composite rate
reflecting the Company&#146;s earnings and the applicable tax rates in the various
locations where the Company operates. </FONT></P>
<P align=justify><FONT face=serif size=2>The vast majority of the Company&#146;s
goodwill is not deductible for income tax purposes. The Company recognized tax
benefits of approximately $29.1 million and $59.1 million during the third
quarter and nine fiscal months ended September 27, 2008, respectively,
associated with the goodwill and indefinite-lived intangible asset impairment
charges discussed in Note 3. </FONT></P>
<P align=justify><FONT face=serif size=2>In connection with the repurchase of
the convertible subordinated notes on August 1, 2008 (see Note 6), the Company
repatriated approximately $250 million of cash from non-U.S. subsidiaries. This
repatriation of cash resulted in net tax expense of approximately $9.9 million,
recorded in the second quarter of 2008, after the utilization of net operating
losses and tax credits.</FONT></P>
<P align=justify><FONT face=serif size=2>Although the Company utilized cash and
profits generated by its foreign subsidiaries to fund the repurchase
transaction, at the present time, the Company expects that the remaining cash
and profits generated by foreign subsidiaries will continue to be reinvested
indefinitely. </FONT></P>
<P align=justify><FONT face=serif size=2>During the nine fiscal months ended
September 27, 2008, the liabilities for unrecognized tax benefits decreased by a
net $7.6 million, due principally to the settlement of tax audits (approximately
$14.7 million), partially offset by increases for tax positions taken during the
period (approximately $5.4 million) and foreign currency effects (approximately
$1.9 million). </FONT></P>
<P align=justify><FONT face=serif size=2>Income tax expense for the nine fiscal
months ended September 29, 2007, includes additional tax expense of
approximately $3.3 million for changes in uncertain tax positions related to tax
positions taken in prior years. Income tax expense for the third quarter and
nine fiscal months ended September 29, 2007 reflects a benefit of $0.8 million,
representing the effects of adjusting deferred income taxes for a tax rate
decrease enacted in Germany.</FONT></P>
<P align=center><FONT face=serif size=2>21 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Note 6 &#150; Long-Term
Debt</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>Long-term debt consists of the
following </FONT><I><FONT face=serif size=2>(in thousands):</FONT></I><FONT face=serif size=2> </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; </TD>
    <TD noWrap align=center width="15%" colSpan=2><B><FONT face=serif size=2>September 27,</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=2><B><FONT face=serif size=2>December 31,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="15%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="15%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%" bgColor=#c0c0c0><FONT face=serif size=2>Convertible subordinated notes, due 2023</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,870</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0><FONT face=serif size=2>500,000</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><FONT face=serif size=2>Exchangeable
      unsecured notes, due 2102</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="14%"><B><FONT face=serif size=2>105,000</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="14%"><FONT face=serif size=2>105,000</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%" bgColor=#c0c0c0><FONT face=serif size=2>Credit facility - revolving debt</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0><B><FONT face=serif size=2>125,000</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><FONT face=serif size=2>Credit facility
      - term loan</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="14%"><B><FONT face=serif size=2>125,000</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="14%"><FONT face=serif size=2>-</FONT>&nbsp;
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%" bgColor=#c0c0c0><FONT face=serif size=2>Other debt</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="14%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,156</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="14%" bgColor=#c0c0c0><FONT face=serif size=2>3,583</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="14%"><B><FONT face=serif size=2>359,026</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="14%"><FONT face=serif size=2>608,583</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%" bgColor=#c0c0c0><FONT face=serif size=2>Less current portion</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="14%" bgColor=#c0c0c0><B><FONT face=serif size=2>25,488</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="14%" bgColor=#c0c0c0><FONT face=serif size=2>1,346</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="14%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT><STRONG>333,538</STRONG></FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="14%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>607,237</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=justify><B><I><FONT face=serif size=2>Convertible Subordinated Notes,
due 2023 </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Holders of the Company&#146;s 3-5/8%
convertible subordinated notes had the right to require the Company 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 on August 1,
2008 (and other dates specified in the notes). </FONT></P>
<P align=justify><FONT face=serif size=2>Substantially all (99.6%) of the
holders of the 3-5/8% notes exercised their option to require the Company to
repurchase their notes on August 1, 2008. The purchase price was paid in cash
and funded from approximately $250 million of cash on-hand, $125 million of
borrowings under the revolving credit facility described below, and $125 million
from the term loan commitment described below.</FONT></P>
<P align=justify><FONT face=serif size=2>The purchase price for the notes was
equal to their principal amount, and accordingly, the Company did not recognize
any gain or loss on the repurchase of the Notes. However, as a consequence of
the extinguishment of the notes prior to their stated maturity date of 2023, in
the third quarter of 2008, the Company recorded a loss on early extinguishment
of debt of $13,601,000, to write-off unamortized debt issuance costs associated
with the 2003 issuance of the notes.</FONT><B><I><FONT face=serif size=2>
</FONT></I></B></P>
<P align=justify><B><I><FONT face=serif size=2>Credit Facility
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>On June 24, 2008, the Company entered
into its Fourth Amended and Restated Credit Agreement. The amended credit
facility amends certain terms of the Third Amended and Restated Credit
Agreement, dated as of April 20, 2007, including the applicable interest rates
with respect to borrowings under the revolving credit commitment. The new credit
facility continues to provide a revolving credit commitment of up to $250
million through April 20, 2012. </FONT></P>
<P align=justify><FONT face=serif size=2>Interest on the revolving credit
commitment is payable at prime or other variable interest rate options. The
Company is required to pay facility commitment fees. The amended credit facility
continues to restrict the Company from paying cash dividends and requires the
Company to comply with other covenants, including the maintenance of specific
financial ratios. The Company is in compliance with all covenants. In July 2008,
the Company borrowed $125 million under the revolving credit facility for the
purpose of repurchasing the Company&#146;s 3-5/8% convertible subordinated notes due
2023 (as further described above). Borrowings outstanding on the revolving
credit facility at September 27, 2008 bear interest at LIBOR plus 1.00%.
</FONT></P>
<P align=justify><FONT face=serif size=2>The borrowings under the amended credit
facility continue to be secured by pledges of stock in certain significant
subsidiaries and certain guarantees by significant subsidiaries. The
subsidiaries would be required to perform under the guarantees in the event that
the Company failed to make principal or interest payments under the credit
facility. Certain of the Company&#146;s subsidiaries are permitted to borrow under
the credit facility. Any borrowings by these subsidiaries under the credit
facility are guaranteed by the Company. </FONT></P>
<P align=center><FONT face=serif size=2>22 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>In addition, the amended credit
facility provides for a new senior secured term loan commitment of up to $125
million. The $125 million principal amount of such loan was drawn in July 2008
for the purpose of repurchasing the Company&#146;s 3-5/8% convertible subordinated
notes due 2023 (as further described below). The principal amount of such term
loan will be due as follows: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="19%">&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face=serif size=2>January 1, 2009</FONT>&nbsp; </TD>
    <TD noWrap align=left width="10%" bgColor=#c0c0c0><FONT face=serif size=2>$12.5 million</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="19%"></TD>
    <TD noWrap align=left width="70%"><FONT face=serif size=2>July 1,
      2009</FONT>&nbsp; </TD>
    <TD noWrap align=left width="10%"><FONT face=serif size=2>$12.5
      million</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="19%">&nbsp;</TD>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face=serif size=2>January 1, 2010</FONT>&nbsp; </TD>
    <TD noWrap align=left width="10%" bgColor=#c0c0c0><FONT face=serif size=2>$12.5 million</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="19%"></TD>
    <TD noWrap align=left width="70%"><FONT face=serif size=2>July 1,
      2010</FONT>&nbsp; </TD>
    <TD noWrap align=left width="10%"><FONT face=serif size=2>$12.5
      million</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="19%"></TD>
    <TD noWrap align=left width="70%" bgColor=#c0c0c0><FONT face=serif size=2>January 1, 2011</FONT>&nbsp; </TD>
    <TD noWrap align=left width="10%" bgColor=#c0c0c0><FONT face=serif size=2>$37.5 million</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="19%"></TD>
    <TD noWrap align=left width="70%"><FONT face=serif size=2>July 1,
      2011</FONT>&nbsp; </TD>
    <TD noWrap align=left width="10%"><FONT face=serif size=2>$37.5
      million</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Pursuant to the terms of the amended
credit facility, there are no penalties for early payments of the term loan.
Prepayments of the term loan principal would reduce all future principal
payments under the term loan. </FONT></P>
<P align=justify><FONT face=serif size=2>The borrowings under the new term loan
commitment, based on current leverage ratios, will bear interest at LIBOR plus
2.50%.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Other Borrowings Information
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Aggregate annual maturities of
long-term debt, based on the terms stated in the respective agreements, are as
follows </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#c0c0c0><FONT face=serif size=2>Remainder of 2008</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0><FONT face=serif size=2>419</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face=serif size=2>2009</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="14%"><FONT face=serif size=2>25,345</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#c0c0c0><FONT face=serif size=2>2010</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0><FONT face=serif size=2>25,047</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face=serif size=2>2011</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="14%"><FONT face=serif size=2>75,000</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%" bgColor=#c0c0c0><FONT face=serif size=2>2012</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0><FONT face=serif size=2>125,000</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="84%"><FONT face=serif size=2>Thereafter</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="14%"><FONT face=serif size=2>108,215</FONT>
    </TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>23 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2><U>Note 7 &#150; Comprehensive Income
(Loss)</U></FONT></B></P>
<P align=justify><FONT face=serif size=2>Comprehensive income (loss) includes
the following components </FONT><I><FONT face=serif size=2>(in
thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="54%"></TD>
    <TD noWrap align=center width="22%" colSpan=6>&nbsp; &nbsp;<B><FONT face=serif size=2>Fiscal quarter ended</FONT></B>&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="22%" colSpan=6>&nbsp; <B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="10%" colSpan=3>&nbsp; <B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="11%" colSpan=2><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="11%" colSpan=3>&nbsp; <B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="10%" colSpan=2><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%" bgColor=#c0c0c0><FONT face=serif size=2>Net earnings (loss)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>(312,867</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><FONT face=serif size=2>35,175</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>(1,079,124</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><FONT face=serif size=2>125,886</FONT> </TD></TR>
  <TR>
    <TD width="99%" colSpan=14>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%" bgColor=#c0c0c0><FONT face=serif size=2>Other comprehensive income (loss):</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="10%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="9%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="9%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%">&nbsp; &nbsp;&nbsp; <FONT face=serif size=2>Foreign currency translation</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="8%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="9%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="9%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>adjustment</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="8%"><B><FONT face=serif size=2>(49,449</FONT></B> </TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>46,289</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="9%"><B><FONT face=serif size=2>31,530</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="9%"><FONT face=serif size=2>64,858</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>Unrealized gain (loss) on available</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="10%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="9%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="9%" bgColor=#c0c0c0>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>for sale securities</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>(130</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><FONT face=serif size=2>38</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>(523</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="9%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>Pension and other postretirement</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="8%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="10%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="9%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="9%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2>adjustments</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><B><FONT face=serif size=2>1,316</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="10%"><FONT face=serif size=2>1,588</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%"><B><FONT face=serif size=2>4,330</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%"><FONT face=serif size=2>6,507</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%" bgColor=#c0c0c0><FONT face=serif size=2>Total other comprehensive income (loss)</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%" bgColor=#c0c0c0><B><FONT face=serif size=2>(48,263</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="10%" bgColor=#c0c0c0><FONT face=serif size=2>47,915</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%" bgColor=#c0c0c0><B><FONT face=serif size=2>35,337</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="9%" bgColor=#c0c0c0><FONT face=serif size=2>71,365</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="54%"><FONT face=serif size=2>Comprehensive
      income (loss)</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="8%">&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif size=2><B>(361,130</B></FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="10%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>83,090</FONT> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="9%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT><STRONG>(1,043,787</STRONG></FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="9%"><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;
      </FONT>197,251</FONT> </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Other comprehensive income (loss)
includes Vishay&#146;s proportionate share of other comprehensive income (loss) of
nonconsolidated subsidiaries accounted for under the equity method. </FONT></P>
<P align=center><FONT face=serif size=2>24 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2><U>Note 8 &#150; Pensions and Other
Postretirement Benefits</U></FONT></B><B><FONT face=serif size=2>
</FONT></B></P>
<P align=justify><FONT face=serif size=2>The Company maintains various
retirement benefit plans. </FONT></P>
<P align=justify><FONT face=serif size=2>The following table shows the
components of the net periodic pension cost for the third quarters of 2008 and
2007 for the Company&#146;s defined benefit pension plans </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>September 27, 2008</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>September 29, 2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Non-U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Non-U.S.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Net service cost</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,035</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,154</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>1,163</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>1,185</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Interest
      cost</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>4,155</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>3,293</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>3,968</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>2,736</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Expected return on plan assets</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(5,220</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(651</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(5,138</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(745</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Amortization of
      prior service cost</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>(42</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>81</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Amortization of losses</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>564</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>867</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>831</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>1,232</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Net periodic
      benefit cost</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>492</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>4,663</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>905</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>4,408</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The following table shows the
components of the net periodic pension cost for the nine fiscal months ended
September 27, 2008 and September 29, 2007 for the Company&#146;s defined benefit
pension plans </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>September 27, 2008</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>September 29, 2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Non-U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Non-U.S.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Net service cost</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>3,105</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>3,502</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>3,489</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>3,512</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Interest
      cost</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>12,464</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>9,966</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>11,903</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>8,062</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Expected return on plan assets</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(15,660</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(2,008</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(15,414</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(2,196</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Amortization of
      prior service cost</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>(126</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>243</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Amortization of losses</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,692</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,601</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>2,493</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>3,671</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Net periodic
      benefit cost</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>1,475</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>14,061</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>2,714</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>13,049</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>25 </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The following table shows the
components of the net periodic benefit cost for the third quarters of 2008 and
2007 for the Company&#146;s other postretirement benefit plans </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=6><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=6><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=6><B><FONT face=serif size=2>September 27, 2008</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=6><B><FONT face=serif size=2>September 29, 2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Non-U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Non-U.S.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Plans</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Service cost</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>54</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>100</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>59</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>116</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Interest
      cost</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>275</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>105</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>286</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>92</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Amortization of prior service cost</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>19</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>21</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Amortization of
      transition obligation</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>48</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>48</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Amortization of gains</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(157</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(5</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Net periodic
      benefit cost</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>239</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%"><B><FONT face=serif size=2>205</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>409</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%"><FONT face=serif size=2>208</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The following table shows the
components of the net periodic pension cost for the nine fiscal months ended
September 27, 2008 and September 29, 2007 for the Company&#146;s other postretirement
benefit plans </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=center width="67%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=6><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=6><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="67%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=6><B><FONT face=serif size=2>September 27, 2008</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=6><B><FONT face=serif size=2>September 29, 2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="67%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Non-U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>U.S.</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Non-U.S.</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="67%"></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Plans</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=2><B><FONT face=serif size=2>Plans</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#c0c0c0><FONT face=serif size=2>Service cost</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>162</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>302</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>177</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>341</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"><FONT face=serif size=2>Interest
      cost</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>825</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>317</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>858</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>270</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#c0c0c0><FONT face=serif size=2>Amortization of prior service cost</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>57</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>63</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"><FONT face=serif size=2>Amortization of
      transition obligation</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>144</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>144</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%" bgColor=#c0c0c0><FONT face=serif size=2>Amortization of gains</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(472</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(17</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="67%"><FONT face=serif size=2>Net periodic
      benefit cost</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>716</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%"><B><FONT face=serif size=2>619</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>1,225</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="6%"><FONT face=serif size=2>611</FONT></TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>26 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Note 9 &#150; Stock-Based
Compensation</FONT></U></B></P>
<P align=justify><FONT face=serif size=2>As of December 31, 2007, the Company
had four active stockholder-approved stock option programs, namely the 1997
Stock Option Program, the 1998 Stock Option Program, a stock option plan assumed
in the 2001 acquisition of General Semiconductor, Inc., and the 2007 Stock
Option Program.</FONT></P>
<P align=justify><FONT face=serif size=2>The Company also has a
stockholder-approved Phantom Stock Plan which grants phantom stock units to
certain executives as part of their employment agreements with the Company, and
two employee stock plans under which restricted stock may be granted.</FONT></P>
<P align=justify><FONT face=serif size=2>These plans are more fully described in
Note 12 to the Company&#146;s consolidated financial statements included in its
Annual Report on Form 10-K for the year ended December 31, 2007. </FONT></P>
<P align=justify><FONT face=serif size=2>On March 16, 2008, the stockholder
approval for the 1998 Stock Option Program expired. No additional options may be
granted pursuant to this plan.</FONT></P>
<P align=justify><FONT face=serif size=2>On May 28, 2008, the Company&#146;s
stockholders approved amendments to the 2007 Stock Option Program (renamed the
2007 Stock Incentive Program) (the &#147;2007 Program&#148;). The amended 2007 Program
permits the grant of restricted stock, unrestricted stock, and restricted stock
units (&#147;RSUs&#148;), in addition to stock options, to officers, employees, and
non-employee directors. </FONT><B><I><FONT face=serif size=2></FONT></I></B></P>
<P align=justify><B><I><FONT face=serif size=2>Stock Options </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Option activity under the stock option
plans as of September 27, 2008 and changes in the nine fiscal months then ended
are presented below </FONT><I><FONT face=serif size=2>(number of options in
thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="80%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=center width="12%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="11%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%"><B><FONT face=serif size=2>Weighted</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="12%"></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%" colSpan=2><B><FONT face=serif size=2>Weighted</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%"><B><FONT face=serif size=2>Average</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=2><B><FONT face=serif size=2>Number</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%" colSpan=2><B><FONT face=serif size=2>Average</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%"><B><FONT face=serif size=2>Remaining</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=2><B><FONT face=serif size=2>of</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%" colSpan=2><B><FONT face=serif size=2>Exercise</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%"><B><FONT face=serif size=2>Contractual</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=2><B><FONT face=serif size=2>Options</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%" colSpan=2><B><FONT face=serif size=2>Price</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="12%"><B><FONT face=serif size=2>Term (Years)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><B><FONT face=serif size=2>Outstanding:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="14%" bgColor=#c0c0c0 colSpan=2></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="11%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="12%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT face=serif size=2>December 31,
      2007</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="12%"><B><FONT face=serif size=2>4,691</FONT></B></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="11%"><B><FONT face=serif size=2>18.09</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="12%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT face=serif size=2>Granted</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="12%" bgColor=#c0c0c0><B><FONT face=serif size=2>36</FONT></B></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="11%" bgColor=#c0c0c0><B><FONT face=serif size=2>8.76</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="12%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT face=serif size=2>Exercised</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="12%"><B><FONT face=serif size=2>(31</FONT></B></TD>
    <TD noWrap align=left width="2%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="11%"><B><FONT face=serif size=2>5.60</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="12%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT face=serif size=2>Cancelled</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="12%" bgColor=#c0c0c0><B><FONT face=serif size=2>(330</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="2%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="11%" bgColor=#c0c0c0><B><FONT face=serif size=2>20.91</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="12%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><B><FONT face=serif size=2>Outstanding
      at September 27, 2008</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><B><FONT face=serif size=2>4,366</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="11%"><B><FONT face=serif size=2>17.89</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><B><FONT face=serif size=2>2.55</FONT></B></TD></TR>
  <TR>
    <TD noWrap width="100%" colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><B><FONT face=serif size=2>Vested and expected to vest</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="12%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="11%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="12%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; at September 27,
      2008</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%" bgColor=#c0c0c0><B><FONT face=serif size=2>4,366</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="11%" bgColor=#c0c0c0><B><FONT face=serif size=2>17.89</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%" bgColor=#c0c0c0><B><FONT face=serif size=2>2.55</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><B><FONT face=serif size=2>Exercisable
      at September 27, 2008</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><B><FONT face=serif size=2>3,916</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="2%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="11%"><B><FONT face=serif size=2>18.07</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><B><FONT face=serif size=2>2.33</FONT></B></TD></TR></TABLE>
<P align=center><FONT size=2>27&nbsp;<BR></FONT>&nbsp;<BR>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The Company determines compensation
cost for stock options based on the grant-date fair value of the options
granted. Compensation cost is recognized over the period that an employee
provides service in exchange for the award.</FONT></P>
<P align=justify><FONT face=serif size=2>The weighted average fair value of the
options granted was estimated using the Black-Scholes option-pricing model, with
the assumptions presented below. Options granted during the nine fiscal months
ended September 27, 2008 had a weighted average fair value of $4.93, and an
exercise price equal to the market value of the underlying shares of Vishay
common stock on the date of grant. </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=center width="16%" colSpan=3><B><FONT face=serif size=2>2008</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="16%" colSpan=3><B><FONT face=serif size=2>Grants</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face=serif size=2>Expected dividend yield</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=center width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>0.0%</FONT></B></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face=serif size=2>Risk-free
      interest rate</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>3.5%</FONT></B></TD>
    <TD noWrap align=left width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%" bgColor=#c0c0c0><FONT face=serif size=2>Expected volatility</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=center width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>58.3%</FONT></B></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="83%"><FONT face=serif size=2>Expected life
      (in years)</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=center width="6%"><B><FONT face=serif size=2>7.23</FONT></B></TD>
    <TD noWrap align=left width="5%"></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>During the nine fiscal months ended
September 27, 2008, 98,000 options vested and 62,000 unvested options were
cancelled. At September 27, 2008, there are 450,000 unvested options
outstanding, with a weighted average grant-date fair value of $9.46 per option.
</FONT></P>
<P align=justify><FONT face=serif size=2>During the nine fiscal months ended
September 27, 2008 and September 29, 2007, the Company recorded pretax
compensation expense (within selling, general, and administrative expenses)
associated with employee stock options of $1,022,000 and $905,000, respectively.
At September 27, 2008, there was approximately $2.6 million of unrecognized
compensation cost related to unvested stock options.</FONT></P>
<P align=justify><FONT face=serif size=2>The aggregate pretax intrinsic value
(the difference between the closing stock price on the last trading day of the
third quarter of 2008 of $6.81 per share and the exercise price, multiplied by
the number of in-the-money options) that would have been received by the option
holders had all option holders exercised their options on September 27, 2008
would be approximately $0.2 million. This amount changes based on changes in the
market value of the Company&#146;s common stock. The total intrinsic value of options
exercised during the nine fiscal months ended September 27, 2008 was
approximately $0.2 million. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Phantom Stock Plan
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>On both January 2, 2008 and January 3,
2007, the Company granted 25,000 phantom stock units pursuant to employment
agreements between the Company and certain executives. In the first quarter of
2008 and 2007, the Company recognized compensation expense of $286,000 and
$344,000, respectively, equal to the market value of the underlying stock on the
date of grant.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Restricted Stock
Units</FONT></I></B><FONT face=serif size=2> </FONT></P>
<P align=justify><FONT face=serif size=2>In May 2008, 480,000 RSUs were granted
to certain officers and directors. Each RSU entitles the recipient to receive a
share of common stock when the RSU vests. The RSUs granted in May 2008 were
scheduled to vest as follows: </FONT></P>
<UL style="FONT-SIZE: 10pt; TEXT-ALIGN: justify">
  <LI>168,000 RSUs granted to officers vest in six equal installments beginning
  on the grant date and each of the first five anniversaries of that date.
  <LI>144,000 RSUs granted to directors vest in three equal installments
  beginning on the grant date and each of the first two anniversaries of that
  date.
  <LI>168,000 RSUs granted to officers will vest, provided that certain 2008
  performance conditions are attained, in six equal installments on the first
  six anniversaries of the grant date. If the performance conditions are not
  attained, these RSUs will be forfeited.</LI></UL>
<P align=justify><FONT face=serif size=2>RSUs granted to an officer were
cancelled during the third quarter of 2008 (see Note 10). </FONT></P>
<P align=center><FONT face=serif size=2>28 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>RSU activity for the period ended
September 27, 2008 is presented below </FONT><I><FONT face=serif size=2>(number
of RSUs in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="80%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="13%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%"><B><FONT face=serif size=2>Weighted</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="13%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=2><B><FONT face=serif size=2>Grant</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%"><B><FONT face=serif size=2>Average</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=2><B><FONT face=serif size=2>Number</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=2><B><FONT face=serif size=2>date</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%"><B><FONT face=serif size=2>Remaining</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=2><B><FONT face=serif size=2>of</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%" colSpan=2><B><FONT face=serif size=2>fair value</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="14%"><B><FONT face=serif size=2>Vesting</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=2><B><FONT face=serif size=2>RSUs</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%" colSpan=2><B><FONT face=serif size=2>per unit</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="14%"><B><FONT face=serif size=2>Period (Years)</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%" bgColor=#c0c0c0><B><FONT face=serif size=2>Outstanding:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="13%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="14%" bgColor=#c0c0c0 colSpan=2></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=left width="14%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"><FONT face=serif size=2>Granted</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="13%"><B><FONT face=serif size=2>480</FONT></B></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="13%"><B><FONT face=serif size=2>9.88</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="14%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%" bgColor=#c0c0c0><FONT face=serif size=2>Vested</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="13%" bgColor=#c0c0c0><B><FONT face=serif size=2>(76</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="13%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="14%" bgColor=#c0c0c0>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%"><FONT face=serif size=2>Cancelled</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="13%"><B><FONT face=serif size=2>(51</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="13%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="14%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%" bgColor=#c0c0c0><B><FONT face=serif size=2>Outstanding at September 27, 2008</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" vAlign=top noWrap align=right width="13%" bgColor=#c0c0c0><B><FONT face=serif size=2>353</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="13%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" vAlign=top noWrap align=right width="14%" bgColor=#c0c0c0><B><FONT face=serif size=2>2.46</FONT></B></TD></TR>
  <TR>
    <TD width="100%" colSpan=9>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="55%" bgColor=#c0c0c0><B><FONT face=serif size=2>Expected to vest at September 27, 2008</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" vAlign=top noWrap align=right width="13%" bgColor=#c0c0c0><B><FONT face=serif size=2>213</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD vAlign=top noWrap align=right width="13%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" vAlign=top noWrap align=right width="14%" bgColor=#c0c0c0><B><FONT face=serif size=2>1.99</FONT></B></TD></TR></TABLE>
<P align=justify><FONT face=serif size=2>The Company determines compensation
cost for RSUs based on the grant-date fair value of the underlying common stock.
Compensation cost is recognized over vesting period for those RSUs expected to
vest. During the nine fiscal months ended September 27, 2008, the Company
recorded pretax compensation expense (within selling, general, and
administrative expenses) associated with RSUs of $1,163,000. At September 27,
2008, there was approximately $3.1 million of unrecognized compensation cost
related to unvested RSUs, including approximately $1.2 million of unrecognized
compensation cost for RSUs for which the achievement of performance-based
vesting criteria is not probable.</FONT><FONT face=serif> </FONT></P>
<P align=center><FONT face=serif size=2>29 <BR>&nbsp;</FONT><BR>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Note 10 &#150; Commitments and
Contingencies</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><B><I><FONT face=serif size=2>Semiconductor Foundry Agreements
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Our Siliconix subsidiary maintains
long-term foundry agreements with subcontractors to ensure access to external
front-end capacity.</FONT></P>
<P align=justify><FONT face=serif size=2>In 2004, Siliconix signed a definitive
long-term foundry agreement for semiconductor manufacturing with Tower
Semiconductor (the &#147;2004 agreement&#148;), pursuant to which Siliconix would purchase
semiconductor wafers from and transfer certain technology to Tower
Semiconductor. Pursuant to the 2004 agreement, Siliconix was required to place
orders valued at approximately $200 million for the purchase of semiconductor
wafers to be manufactured in Tower&#146;s Fab 1 facility over a seven to ten year
period. The 2004 agreement specified minimum quantities per month and a fixed
quantity for the term of the agreement. Siliconix was required to pay for any
short-fall in minimum order quantities specified under the agreement through the
payment of penalties equal to unavoidable fixed costs. </FONT></P>
<P align=justify><FONT face=serif size=2>Pursuant to the 2004 agreement,
Siliconix advanced $20 million to Tower in 2004, to be used for the purchase of
additional equipment required to satisfy Siliconix&#146;s orders. This advance was
considered a prepayment on future wafer purchases, reducing the per wafer cost
to Siliconix over the term of the agreement.</FONT></P>
<P align=justify><FONT face=serif size=2>During 2007, Siliconix was committed to
purchase approximately $22 million of semiconductor wafers, but did not meet its
commitments due to changing market demand for products manufactured using wafers
supplied by Tower. Siliconix was required to pay penalties of approximately $1.7
million, which were recorded as a component of cost of products sold.</FONT></P>
<P align=justify><FONT face=serif size=2>In January 2008, Siliconix reached an
agreement in principle to revise the 2004 agreement to more accurately reflect
market demand. Based on the penalties paid in 2007 and the agreement in
principle, during the fourth quarter of 2007, the Company recorded a write-off
of the balance of the prepayment amount of $16,393,000, and accrued an
additional $2,500,000 based on its best estimate of additional contract
termination charges related to the original agreement. </FONT></P>
<P align=justify><FONT face=serif size=2>At December 31, 2007, the remaining
future purchase commitments under the 2004 agreement were approximately $160
million.</FONT></P>
<P align=justify><FONT face=serif size=2>In March 2008, Siliconix and Tower
entered into an amended and restated foundry agreement (the &#147;2008 agreement&#148;).
Pursuant to the 2008 agreement, Tower will continue to manufacture wafers
covered by the 2004 agreement, but at lower quantities and at lower prices,
through 2009. Tower will also begin manufacturing wafers for other product lines
acquired as part of the PCS acquisition through 2012, pending a scheduled
technology transfer. Siliconix must pay for any short-fall in the reduced
minimum order quantities specified under the 2008 agreement through the payment
of penalties equal to unavoidable fixed costs. Additionally, as contemplated by
the 2007 contract termination charge, Siliconix agreed to forgive the prepayment
amount and pay a $2,500,000 contract termination charge. </FONT></P>
<P align=justify><FONT face=serif size=2>Management estimates its minimum
purchase commitments under the 2008 agreement as follows </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>2008</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><FONT face=serif size=2>20,400</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>2009</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>14,700</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>2010</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><FONT face=serif size=2>8,400</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%"><FONT face=serif size=2>2011</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="10%"><FONT face=serif size=2>8,800</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="88%" bgColor=#c0c0c0><FONT face=serif size=2>2012</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="10%" bgColor=#c0c0c0><FONT face=serif size=2>8,800</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Siliconix has granted Tower an option
to produce additional wafers under this agreement, as needed by Siliconix, and
accordingly, actual purchases from Tower may be greater than the commitments
disclosed above. </FONT></P>
<P align=justify><FONT face=serif size=2>These purchase commitments are for the
manufacture of proprietary products using Siliconix-owned technology licensed to
Tower by Siliconix, and accordingly, management can only estimate the &#147;market
price&#148; of the wafers which are the subject of the 2008 agreement. Management
believes that these commitments are at prices that are not in excess of current
market prices. </FONT></P>
<P align=center><FONT face=serif size=2>30 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Executive Employment Agreements
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>The Company has employment agreements
with certain of its executives. With the exception of the employment arrangement
with Dr. Felix Zandman, Executive Chairman and founder of the Company, the
executive employment agreements contain severance provisions providing generally
for 3 years of compensation in the case of a termination without cause or a
voluntary termination by the executive for &#147;good reason&#148; as defined in the
employment agreement. Specifically, severance items include: </FONT></P>
<UL style="FONT-SIZE: 10pt; TEXT-ALIGN: justify">
  <LI>salary continuation for three years, payable over three years;
  <LI>5,000 shares of common stock annually for three years;
  <LI>bonus for the year of termination;
  <LI>$1,500,000 lump sum cash payment. This payment replaces the annual
  deferred compensation credits and the annual bonus for the 3-year severance
  period; and
  <LI>lifetime continuation of executive&#146;s life insurance and medical benefit up
  to $15,000 annual premium value.</LI></UL>
<P align=justify><FONT face=serif size=2>On July 30, 2008, the Board of
Directors was notified that Richard N. Grubb, the Company&#146;s Chief Financial
Officer, would be stepping down for &#147;good reason&#148; effective September 1, 2008,
in connection with a change in the corporate finance and accounting function of
the Company. The Company recorded severance charges associated with Mr. Grubb&#146;s
termination during the third quarter of 2008. These costs are reported in
&#147;restructuring and severance costs&#148; on the consolidated condensed statements of
operations. </FONT></P>
<P align=center><FONT face=serif size=2>31 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2><U>Note 11 &#150; Segment
Information</U></FONT></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>Vishay designs, manufactures, and
markets electronic components that cover a wide range of products and
technologies. The Company has two reportable segments: Semiconductors,
consisting principally of diodes, transistors, power MOSFETs, power conversion
and motor control integrated circuits, optoelectronic components, and IRDCs; and
Passive Components, consisting principally of fixed resistors, solid tantalum
surface mount chip capacitors, solid tantalum leaded capacitors, wet/foil
tantalum capacitors, multi-layer ceramic chip capacitors, film capacitors,
inductors, transducers, strain gages, and load cells. </FONT></P>
<P align=justify><FONT face=serif size=2>The Company evaluates business segment
performance based upon operating income, exclusive of certain items (&#147;segment
operating income&#148;). Management believes that evaluating segment performance
excluding items such as goodwill impairment, restructuring and severance, asset
write-downs, inventory write-downs, losses on purchase commitments, contract
termination charges, charges for in-process research and development, and other
items is meaningful because it provides insight with respect to intrinsic
operating results of the Company. These items, and unallocated corporate
expenses, represent reconciling items between segment operating income and
consolidated operating income. Business segment assets are the owned or
allocated assets used by each business segment. The following table sets forth
business segment information for the fiscal quarters and nine fiscal months
ended September 27, 2008 and September 29, 2007 </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>:</FONT><FONT face=serif size=1> </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><B><FONT face=serif size=2>Net revenues:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><I><FONT face=serif size=2><U>Semiconductors</U></FONT></I></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="5%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Product sales</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>391,748</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>398,476</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,185,075</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>1,097,826</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Royalty revenues</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><B><FONT face=serif size=2>1,186</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>2,491</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><B><FONT face=serif size=2>3,082</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>5,761</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Total Semiconductors</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>392,934</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>400,967</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,188,157</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>1,103,587</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><I><FONT face=serif size=2><U>Passive
      Components</U></FONT></I></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Product sales</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>346,158</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>328,649</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,058,612</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>1,000,082</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Total Passive Components</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><B><FONT face=serif size=2>346,158</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>328,649</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><B><FONT face=serif size=2>1,058,612</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>1,000,082</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>739,092</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>729,616</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,246,769</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>2,103,669</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD noWrap align=left width="68%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><B><FONT face=serif size=2>Segment
      operating income:</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Semiconductors</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>33,187</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>46,066</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>107,911</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>130,184</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Passive
      Components</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>20,705</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>22,968</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>74,528</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>89,023</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Corporate</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(7,235</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(4,820</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(23,684</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(20,649</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Restructuring
      and severance costs</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>(6,849</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>(9,920</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>(33,960</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>(13,186</FONT></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Asset write-downs</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(4,195</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(2,665</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Impairment of
      goodwill and intangibles</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>(357,917</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>(1,157,917</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Terminated tender offer expenses</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(4,000</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(4,000</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Consolidated
      operating income (loss)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>(322,109</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>54,294</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>(1,041,317</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>182,707</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD noWrap align=left width="68%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><B><FONT face=serif size=2>Restructuring and severance costs:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Semiconductors</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>1,085</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>343</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>5,287</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>1,179</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Passive Components</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>5,764</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>9,577</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>28,673</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>12,007</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>6,849</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>9,920</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>33,960</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>13,186</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD noWrap align=left width="68%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><B><FONT face=serif size=2>Asset write-downs:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Semiconductors</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>2,665</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Passive Components</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>4,195</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>4,195</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>2,665</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD noWrap align=left width="68%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><B><FONT face=serif size=2>Impairment of goodwill and intangibles:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"><FONT face=serif size=2>Semiconductors</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>35,000</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>585,000</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%" bgColor=#c0c0c0><FONT face=serif size=2>Passive Components</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>322,917</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>572,917</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="68%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>357,917</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>1,157,917</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>-</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>32 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The goodwill and indefinite-lived
intangible asset impairment charges (see Note 3) and the repurchase of the
convertible subordinated notes (see Note 6) result in a material change in the
total assets by segment from the amount disclosed in the Company&#146;s last annual
report.</FONT></P>
<P align=justify><FONT face=serif size=2>Total assets by segment are as follows
</FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="60%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>September 27,</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>December 31,</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="13%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#c0c0c0><FONT face=serif size=2>Semiconductors</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="12%" bgColor=#c0c0c0><B><FONT face=serif size=2>1,912,893</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="12%" bgColor=#c0c0c0><FONT face=serif size=2>2,693,668</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"><FONT face=serif size=2>Passive
      Components</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><B><FONT face=serif size=2>1,707,209</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="12%"><FONT face=serif size=2>2,209,724</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#c0c0c0><FONT face=serif size=2>Corporate</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="12%" bgColor=#c0c0c0><B><FONT face=serif size=2>42,955</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="12%" bgColor=#c0c0c0><FONT face=serif size=2>91,843</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><B><FONT face=serif size=2>3,663,057</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="12%"><FONT face=serif size=2>4,995,235</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Corporate assets include corporate
cash, property and equipment, and certain other assets. </FONT></P>
<P align=center><FONT face=serif size=2>33 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Note 12 &#150; Earnings Per
Share</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>The following table sets forth the
computation of basic and diluted earnings (loss) per share </FONT><I><FONT face=serif size=2>(in thousands, except earnings (loss) per
share)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="19%" colSpan=7><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="19%" colSpan=7><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"></TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><B><FONT face=serif size=2>Numerator:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT face=serif size=2>Numerator for
      basic earnings (loss) per share:</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="7%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income (loss) from continuing
      operations</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>(312,867</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>37,099</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>(1,036,988</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>129,108</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Loss from
      discontinued operations</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>(1,924</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><B><FONT face=serif size=2>(42,136</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>(3,222</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Net earnings
      (loss)</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>(312,867</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>35,175</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>(1,079,124</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>125,886</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD align=left width="99%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT face=serif size=2>Adjustment to the numerator for continuing</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>operations
      and net earnings (loss):</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#ffffff><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Interest savings assuming conversion of</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="7%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="7%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="7%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="7%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#ffffff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      dilutive convertible and exchangeable</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="7%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="7%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="7%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=right width="7%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#ffffff><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      notes, net of tax</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#ffffff><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#ffffff><FONT face=serif size=2>915</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#ffffff><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#ffffff><FONT face=serif size=2>5,832</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#ffffff></TD></TR>
  <TR>
    <TD align=left width="99%" colSpan=17>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT face=serif size=2>Numerator for diluted earnings (loss) per share:</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Income (loss)
      from continuing operations</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(312,867</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>38,014</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(1,036,988</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>134,940</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Loss from
      discontinued operations</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>(1,924</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>(42,136</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>(3,222</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Net earnings
      (loss)</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%"><B><FONT face=serif size=2>(312,867</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%"><FONT face=serif size=2>36,090</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%"><B><FONT face=serif size=2>(1,079,124</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%"><FONT face=serif size=2>131,718</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD align=left width="99%" colSpan=17>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><B><FONT face=serif size=2>Denominator:</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT face=serif size=2>Denominator for
      basic earnings (loss) per share:</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Weighted average shares</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>186,425</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>186,335</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>186,380</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>185,408</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD align=left width="99%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT face=serif size=2>Effect of dilutive securities:</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Convertible and exchangeable notes</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>6,176</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>14,009</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Employee stock options</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>162</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>539</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Other</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>106</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%"><FONT face=serif size=2>106</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Dilutive potential common shares</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>6,444</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>14,654</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD align=left width="99%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT face=serif size=2>Denominator for diluted earnings (loss) per share:</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif>Adjusted weighted average shares</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>186,425</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>192,779</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>186,380</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>200,062</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD align=left width="99%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT face=serif size=2>Basic earnings (loss) per share:*</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Continuing
      operations</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(1.68</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>0.20</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(5.56</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>0.70</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Discontinued
      operations</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>(0.01</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>(0.23</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>(0.02</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Net earnings
      (loss)</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(1.68</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>0.19</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(5.79</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>0.68</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR>
    <TD align=left width="99%" colSpan=17>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT face=serif size=2>Diluted earnings (loss) per share:*</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Continuing
      operations</FONT></FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(1.68</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>0.20</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(5.56</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>0.67</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Discontinued
      operations</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>(0.01</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><B><FONT face=serif size=2>(0.23</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%" bgColor=#c0c0c0><FONT face=serif size=2>(0.02</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="59%"><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Net earnings
      (loss)</FONT></FONT></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(1.68</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>0.19</FONT></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B></TD>
    <TD noWrap align=right width="7%"><B><FONT face=serif size=2>(5.79</FONT></B></TD>
    <TD noWrap align=left width="1%"><B><FONT face=serif size=2>)</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT></TD>
    <TD noWrap align=right width="7%"><FONT face=serif size=2>0.66</FONT></TD>
    <TD noWrap align=left width="1%"></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>* May not add due to rounding.
</FONT></P>
<P align=center><FONT face=serif size=2>34 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Diluted earnings (loss) per share for
the periods presented do not reflect the following weighted average potential
common shares, as the effect would be antidilutive </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=center width="13%" colSpan=3><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="13%" colSpan=3><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"></TD>
    <TD noWrap align=right width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%"><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%"><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%"><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%"><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#c0c0c0><FONT face=serif size=2>Convertible and exchangeable notes:</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Convertible Subordinated
      Notes, due 2023</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>8,545</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>23,496</FONT></TD>
    <TD noWrap align=right width="1%">&nbsp;</TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>18,512</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>15,664</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#c0c0c0><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Exchangeable
      Unsecured Notes, due 2102</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>6,176</FONT></B></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>6,176</FONT></B></TD>
    <TD noWrap align=center width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"><FONT face=serif size=2>Weighted average
      employee stock options</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>4,416</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>4,289</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>4,461</FONT></B></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>3,627</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%" bgColor=#c0c0c0><FONT face=serif size=2>Weighted average warrants</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>8,824</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>8,824</FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><B><FONT face=serif size=2>8,824</FONT></B></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>8,824</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="72%"><FONT face=serif size=2>Weighted average
      other</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>518</FONT></B></TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>-</FONT></TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="6%"><B><FONT face=serif size=2>307</FONT></B></TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>-</FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>In periods in which they are dilutive,
if the potential common shares related to the convertible and exchangeable notes
are included in the computation, the related interest savings, net of tax,
assuming conversion/exchange is added to the net earnings used to compute
earnings per share.</FONT></P>
<P align=justify><FONT face=serif size=2>The Convertible Subordinated Notes, due
2023 are only convertible upon the occurrence of certain events. While none of
these events has occurred as of September 27, 2008, certain conditions which
could trigger conversion have been deemed to be non-substantive, and
accordingly, the Company has always considered these notes in its diluted
earnings per share computation during periods in which they are dilutive. (As
described in Note 6, substantially all of these notes were repurchased on August
1, 2008.) </FONT></P>
<P align=justify><FONT face=serif size=2>In June 2007, the Company&#146;s Board of
Directors adopted a resolution pursuant to which the Company intends to waive
its rights to settle the principal amount of the Convertible Subordinated Notes,
due 2023, in shares of Vishay common stock. Accordingly, the notes are included
in the diluted earnings per share computation using the &#147;treasury stock method&#148;
(similar to options and warrants) rather than the &#147;if converted method&#148;
otherwise required for convertible debt. Under the &#147;treasury stock method,&#148;
Vishay calculates the number of shares issuable under the terms of the notes
based on the average market price of Vishay common stock during the period, and
that number is included in the total diluted shares figure for the period. If
the average market price is less than $21.28, no shares are included in the
diluted earnings per share computation. For the nine fiscal months ended
September 29, 2007, the computation of diluted earnings per share is weighted
for the periods that the notes were considered conventional convertible debt and
for the period the notes were considered net share settlement securities.
</FONT></P>
<P align=center><FONT face=serif size=2>35 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Note 13 &#150; International Rectifier
Tender Offer</FONT></U></B><FONT face=serif size=2> </FONT></P>
<P align=justify><FONT face=serif size=2>On August 15, 2008, Vishay announced
that it made a non-binding proposal to the International Rectifier Corporation
Board of Directors to acquire all the outstanding shares of International
Rectifier common stock for $21.22 per share in cash. </FONT></P>
<P align=justify><FONT face=serif size=2>On August 29, 2008, International
Rectifier announced that its board of directors had rejected Vishay&#146;s
acquisition proposal. </FONT></P>
<P align=justify><FONT face=serif size=2>On September 10, 2008, Vishay announced
that it had increased the price of its all-cash proposal to acquire all of the
outstanding shares of International Rectifier common stock to $23.00 per share
and that Vishay intended to commence a tender offer to purchase all of the
outstanding shares of International Rectifier for $23.00. </FONT></P>
<P align=justify><FONT face=serif size=2>Also on September 10, 2008, Vishay
delivered a notice to International Rectifier indicating Vishay&#146;s intent to
nominate three independent directors for election to the International Rectifier
Board at International Rectifier&#146;s delayed 2007 annual shareholders meeting, and
to propose certain amendments to International Rectifier&#146;s Amended and Restated
Bylaws to ensure, among other things, that International Rectifier would be
required to hold the 2008 annual meeting and election of Class Two directors
prior to the end of 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>In addition, on September 10, 2008,
Vishay filed a complaint in the Court of Chancery of the State of Delaware
naming as defendants International Rectifier and its eight directors. The
complaint sought an order directing International Rectifier to hold its delayed
2007 annual meeting on October 10, 2008, as then-currently scheduled, and to
hold its 2008 annual meeting not later than December 21, 2008, among other
relief. </FONT></P>
<P align=justify><FONT face=serif size=2>On September 29, 2008, Vishay filed its
definitive proxy statement in connection with International Rectifier&#146;s 2007
annual meeting and commenced a tender offer to purchase all outstanding shares
of International Rectifier for $23.00 per share in cash. </FONT></P>
<P align=justify><FONT face=serif size=2>On October 10, 2008, International
Rectifier held its delayed 2007 annual meeting of stockholders. At that meeting,
a plurality of shares voted favored International Rectifier&#146;s slate of three
directors to Vishay&#146;s nominees. On October 13, 2008, Vishay announced that it
had terminated its offer to acquire all shares of International Rectifier and
dismissed its complaint against International Rectifier and its eight
directors.</FONT></P>
<P align=justify><FONT face=serif size=2>Vishay incurred $4 million of costs
associated with the International Rectifier tender offer, which are presented as
a separate line item in the accompanying consolidated condensed statements of
operations. </FONT></P>
<P align=center><FONT face=serif size=2>36 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Note 14 &#150; New Accounting
Pronouncements</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>In September 2006, the FASB issued SFAS
No. 157, </FONT><I><FONT face=serif size=2>Fair Value
Measurements</FONT></I><FONT face=serif size=2>. This statement defines fair
value, provides guidance for measuring fair value, and requires additional
disclosures. This statement does not require any new fair value measurements,
but rather applies to all other accounting pronouncements that require or permit
fair value measurements. SFAS No. 157 was to be effective for Vishay as of
January 1, 2008. In February 2008, the FASB issued Staff Position (&#147;FSP&#148;) No.
157-2, which provides a one-year delayed application of SFAS No. 157 for
nonfinancial assets and liabilities, except for items that are recognized or
disclosed at fair value in the financial statements on a recurring basis.
Accordingly, Vishay has only partially applied SFAS No. 157 as of January 1,
2008, and will be required to apply the additional provisions related to
nonfinancial assets and liabilities as of January 1, 2009. The partial
application of this standard did not have a material effect on the Company&#146;s
financial position, results of operations, or liquidity, and the adoption of the
remaining aspects which were deferred by FSP No. 157-2 is not expected to have a
material effect on the Company&#146;s financial position, results of operations, or
liquidity.</FONT></P>
<P align=justify><FONT face=serif size=2>The Company adopted SFAS No. 159,
</FONT><I><FONT face=serif size=2>The Fair Value Option for Financial Assets and
Financial Liabilities</FONT></I><FONT face=serif size=2>. SFAS No. 159 permits
entities to choose to measure many financial assets and financial liabilities at
fair value. Unrealized gains and losses on items for which the fair value option
has been elected are reported in earnings. The adoption of this standard did not
have a material effect on the Company&#146;s financial position, results of
operations, or liquidity.</FONT></P>
<P align=justify><FONT face=serif size=2>In December 2007, the FASB issued SFAS
No. 141-R, </FONT><I><FONT face=serif size=2>Business
Combinations</FONT></I><FONT face=serif size=2>. While retaining the fundamental
requirements of SFAS No. 141, this new statement makes various modifications to
the requirements of SFAS No. 141 in regards to the accounting for contingent
consideration, preacquisition contingencies, purchased in-process research and
development, acquisition-related transaction costs, acquisition-related
restructuring costs, and changes in tax valuation allowances and tax uncertainty
accruals. This statement applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. Earlier adoption is
prohibited. The Company is presently evaluating the impact of adopting this
standard. </FONT></P>
<P align=justify><FONT face=serif size=2>In December 2007, the FASB issued SFAS
No. 160, </FONT><I><FONT face=serif size=2>Noncontrolling Interests in
Consolidated Financial Statements.</FONT></I><FONT face=serif size=2> SFAS No.
160 amends ARB No. 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary, which
is sometimes referred to as minority interest, is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. Among other requirements, this statement requires
consolidated net income to be reported at amounts that include the amounts
attributable to both the parent and the noncontrolling interest. It also
requires disclosure, on the face of the consolidated income statement, of the
amounts of consolidated net income attributable to the parent and to the
noncontrolling interest. This statement is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2008. Earlier adoption is prohibited. The Company is presently evaluating the
impact of adopting this standard. </FONT></P>
<P align=justify><FONT face=serif size=2>In March 2008, the FASB issued SFAS No.
161, </FONT><I><FONT face=serif size=2>Disclosures about Derivative Instruments
and Hedging Activities. </FONT></I><FONT face=serif size=2>This statement will
require enhanced disclosures about an entity&#146;s derivative and hedging
activities, and therefore improves the transparency of financial reporting. This
statement is effective for financial statements issued for fiscal years
beginning after November 15, 2008, with early application encouraged. The
adoption of this standard is not expected to have a material effect on the
Company&#146;s financial position, results of operations, or liquidity.</FONT></P>
<P align=justify><FONT face=serif size=2>In May 2008, the FASB staff issued FSP
APB 14-1, </FONT><I><FONT face=serif size=2>Accounting for Convertible Debt
Instruments That May be Settled in Cash upon Conversion (including partial cash
settlement).</FONT></I><FONT face=serif size=2> The guidance included in the new
staff position will significantly impact the accounting for convertible bonds
that may be settled in cash. FSP APB 14-1 will require an issuer to separately
account for the liability and equity components of the instrument in a manner
that reflects the issuer&#146;s nonconvertible debt borrowing rate when interest cost
is recognized in subsequent periods. FSP APB 14-1 will require bifurcation of a
component of the debt, classification of that component in equity, and then
accretion of the resulting discount on the debt as part of the interest expense
being reflected in the statement of operations. FSP APB 14-1 is effective for
fiscal years beginning after December 15, 2008 and earlier adoption is
prohibited. The adoption of the FSP will require retrospective application to
all periods presented. For Vishay, this would include the convertible
subordinated notes due 2023, which were repurchased in August 2008. Given the
retrospective application requirement, upon adoption, Vishay will report an
increase in interest expense associated with these notes for the full year of
2007 and the first three quarters of 2008. The Company is presently evaluating
the quantitative impact of adoption of the FSP. </FONT></P>
<P align=center><FONT face=serif size=2>37 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Item 2</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><B><U><FONT face=serif size=2>Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><B><FONT face=serif size=2>Overview </FONT></B></P>
<P align=justify><FONT face=serif size=2>Vishay Intertechnology, Inc. is an
international manufacturer and supplier of discrete semiconductors and passive
electronic components, including power MOSFETs, power conversion and motor
control integrated circuits, transistors, diodes, optoelectronic components,
resistors, capacitors, inductors, strain gages, load cells, force measurement
sensors, displacement sensors, and photoelastic sensors. Semiconductors and
passive electronic components manufactured by Vishay are used in virtually all
types of electronic products, including those in the industrial, computer,
automotive, consumer electronic products, telecommunications,
military/aerospace, and medical industries. </FONT></P>
<P align=justify><FONT face=serif size=2>Vishay operates in two segments,
Semiconductors and Passive Components. Semiconductors segment products include
transistors, diodes, rectifiers, certain types of integrated circuits, and
optoelectronic products. Passive Components segment products include resistors,
capacitors, and inductors. We include in the Passive Components segment our
Measurements Group, which manufactures and markets strain gages, load cells,
transducers, instruments, and weighing systems whose core components are
resistors that are sensitive to various types of mechanical stress. While the
passive components business had historically predominated at Vishay, following
several acquisitions of semiconductor businesses, revenues from our
Semiconductors and Passive Components segments were essentially split evenly
from 2003 through the first quarter of 2007. On April 1, 2007, Vishay acquired
the Power Control Systems (&#147;PCS&#148;) business of International Rectifier
Corporation, which has been included in the Semiconductors segment. Going
forward, revenues from our Semiconductors segment are expected to represent
slightly more than half of our total revenues.</FONT></P>
<P align=justify><FONT face=serif size=2>Net revenues for the fiscal quarter
ended September 27, 2008 were $739.1 million, compared to $729.6 million for the
fiscal quarter ended September 29, 2007. </FONT></P>
<P align=justify><FONT face=serif size=2>Vishay reported a loss from continuing
operations in the third quarter of 2008 of $312.9 million, or $1.68 per share.
The loss includes noncash goodwill and indefinite-lived intangible asset
impairment charges, totaling $357.9 million ($328.8 million, net of tax). The
amount of the impairment charge is based on a preliminary analysis and may be
adjusted in the fourth quarter. </FONT></P>
<P align=justify><FONT face=serif size=2>The third quarter 2008 results also
include a pretax charge for restructuring and severance costs of $6.8 million, a
loss on early extinguishment of debt of $13.6 million, and $4.0 million of costs
associated with Vishay&#146;s terminated tender offer for all outstanding shares of
International Rectifier. On an after tax basis, these items and the impairment
charges had a negative $1.86 per share effect on earnings (loss) from continuing
operations. </FONT></P>
<P align=justify><FONT face=serif size=2>Income from continuing operations for
the fiscal quarter ended September 29, 2007 was $37.1 million, or $0.20 per
diluted share. Income from continuing operations for the fiscal quarter ended
September 29, 2007 was impacted by pretax charges for restructuring and
severance costs of $9.9 million. Additionally, reported income tax expense is
net of benefits totaling $0.9 million for changes in uncertain tax positions and
a change in enacted tax rates. These items, net, had a negative $0.05 per share
effect on income from continuing operations. </FONT></P>
<P align=justify><FONT face=serif size=2>Net revenues for the nine fiscal months
ended September 27, 2008 were $2,246.8 million, compared to $2,103.7 million for
the nine fiscal months ended September 29, 2007. The loss from continuing
operations for the nine fiscal months ended September 27, 2008 was $1,037.0
million or $5.56 per share, compared to income from continuing operations of
$129.1 million or $0.67 per diluted share for the nine fiscal months ended
September 29, 2007. </FONT></P>
<P align=justify><FONT face=serif size=2>The loss from continuing operations for
the nine fiscal months ended September 27, 2008 was impacted by pretax charges
for goodwill and indefinite-lived asset impairments of $1,157.9 million,
restructuring and severance costs of $34.0 million, related asset write-downs of
$4.2 million, a loss on early extinguishment of debt of $13.6 million, $4.0
million of costs associated with Vishay&#146;s terminated tender offer for all
outstanding shares of International Rectifier, and $9.9 million of tax expense
associated with the repatriation of cash from certain non-U.S. subsidiaries.
Including the tax effects of the pretax charges, these items had a negative
$6.15 per share effect on earnings (loss) from continuing operations.
</FONT></P>
<P align=center><FONT face=serif size=2>38 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Income from continuing operations for
the nine fiscal months ended September 29, 2007 was impacted by pretax charges
for restructuring and severance costs of $13.2 million and related asset
write-downs of $2.7 million. These items and their tax-related consequences,
plus additional tax expense for changes in uncertain tax positions net of
benefits for a change in enacted tax rates totaling $2.5 million, had a negative
$0.09 per share effect on income from continuing operations. </FONT></P>
<P align=justify><FONT face=serif size=2>On April 7, 2008, Vishay sold the
automotive modules and subsystems business unit (&#147;ASBU&#148;) acquired on April 1,
2007 as part of the acquisition of the PCS business of International Rectifier.
The operations of ASBU have been classified as discontinued operations.
Including the loss from discontinued operations, the net loss for the fiscal
quarter and nine fiscal months ended September 27, 2008 was $312.9 million and
$1,079.1 million, respectively, compared to net earnings of $35.2 million and
$125.9 million, respectively, for the comparable prior year periods. </FONT></P>
<P align=justify><FONT face=serif size=2>During the third quarter of 2008, the
electronics industry abruptly experienced the impact of the present macro
economic turbulences. Despite results that were below our expectations, we
continued to generate strong cash flows. We remain confident for the long-term
prospects of our businesses, although we expect further deterioration of market
conditions in the short-term. </FONT></P>
<P align=justify><B><FONT face=serif size=2>Financial Metrics </FONT></B></P>
<P align=justify><FONT face=serif size=2>We utilize several financial measures
and metrics to evaluate the performance and assess the future direction of our
business. These key financial measures and metrics include net revenues, gross
profit margin, end-of-period backlog, and the book-to-bill ratio. We also
monitor changes in inventory turnover and average selling prices (&#147;ASP&#148;).
</FONT></P>
<P align=justify><FONT face=serif size=2>Gross profit margin is computed as
gross profit as a percentage of sales. Gross profit is generally net revenues
less costs of products sold, but also deducts certain other period costs,
particularly losses on purchase commitments and inventory write-downs. Losses on
purchase commitments and inventory write-downs have the impact of reducing gross
profit margin in the period of the charge, but result in improved gross profit
margins in subsequent periods by reducing costs of products sold as inventory is
used. Gross profit margin is clearly a function of net revenues, but also
reflects our ability to contain costs. </FONT></P>
<P align=justify><FONT face=serif size=2>End-of-period backlog is one indicator
of future sales. We include in our backlog only open orders that have been
released by the customer for shipment in the next twelve months. If demand falls
below customers&#146; forecasts, or if customers do not control their inventory
effectively, they may cancel or reschedule the shipments that are included in
our backlog, in many instances without the payment of any penalty. Therefore,
the backlog is not necessarily indicative of the results to be expected for
future periods. </FONT></P>
<P align=justify><FONT face=serif size=2>Another important indicator of demand
in our industry is the book-to-bill ratio, which is the ratio of the amount of
product ordered during a period as compared with the product that we ship during
that period. A book-to-bill ratio that is greater than one indicates that our
backlog is building and that we are likely to see increasing revenues in future
periods. Conversely, a book-to-bill ratio that is less than one is an indicator
of declining demand and may foretell declining sales. </FONT></P>
<P align=justify><FONT face=serif size=2>We focus on our inventory turnover as a
measure of how well we are managing our inventory. We define inventory turnover
for a financial reporting period as our costs of products sold for the four
quarters ending on the last day of the reporting period divided by our average
inventory (computed using each quarter-end balance) for this same period. The
inventory balance used for computation of this ratio includes tantalum
inventories in excess of one year supply, which are classified as other assets
in the consolidated balance sheet. See Note 14 to our consolidated financial
statements included in our Annual Report on Form 10-K for the year ended
December 31, 2007. A higher level of inventory turnover reflects more efficient
use of our capital.</FONT></P>
<P align=justify><FONT face=serif size=2>Pricing in our industry can be
volatile. We analyze trends and changes in average selling prices to evaluate
likely future pricing. The erosion of average selling prices of established
products is typical of the industry. However, we attempt to offset this
deterioration with on-going cost reduction activities and new product
introductions, as newer products typically yield larger gross margins.
</FONT></P>
<P align=center><FONT face=serif size=2>39 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The quarter-to-quarter trends in these
financial metrics can also be an important indicator of the likely direction of
our business. The following table shows net revenues, gross profit margin,
end-of-period backlog, book-to-bill ratio, inventory turnover, and changes in
ASP for our business as a whole during the five quarters beginning with the
third quarter of 2007 through the third quarter of 2008 </FONT><I><FONT face=serif size=2>(dollars in thousands)</FONT></I><FONT face=serif size=2>:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="66%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>3rd Quarter</FONT></B> </FONT></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>4th Quarter</FONT></B> </FONT></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>1st Quarter</FONT></B> </FONT></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>2nd Quarter</FONT></B> </FONT></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>3rd Quarter</FONT></B> </FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>2007</FONT></B>
    </FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>2007</FONT></B>
    </FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>2008</FONT></B>
    </FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>2008</FONT></B>
    </FONT></TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>2008</FONT></B>
    </FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Net revenues</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;729,616</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;729,597</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;733,313</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;774,364</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;739,092</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Gross profit margin</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>24.0%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>22.9%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>23.5%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>23.2%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>21.6%</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>End-of-period backlog</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>678,300</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>646,700</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>696,700</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>695,900</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>619,000</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Book-to-bill ratio</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0.98</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0.96</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1.04</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1.00</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0.92</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Inventory turnover</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3.62</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3.76</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3.74</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3.89</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3.85</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Change in ASP vs. prior quarter</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>-1.3%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>-1.2%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>-0.4%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>-0.9%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>-1.4%</FONT> </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>See &#147;Financial Metrics by Segment&#148;
below for net revenues, book-to-bill ratio, and gross profit margin broken out
by segment.</FONT></P>
<P align=justify><FONT face=serif size=2>Revenues for the third quarter of 2008
were below our expectations. During the quarter, we experienced a substantial
slow down in our order-rate, which has continued into fourth quarter. Gross
profit margin decreased, principally due to lower volume and decreases in ASPs,
particularly in our Semiconductors segment businesses. The book-to-bill ratio
decreased to 0.92 from 1.00 in the second quarter of 2008. Orders were
particularly weak for Semiconductor segment products from Asian distributors.
For the third quarter of 2008, the book-to-bill ratios for distribution
customers and original equipment manufacturers (&#147;OEM&#148;) were 0.88 and 0.95,
respectively, versus ratios of 1.01 and 1.00, respectively, during the second
quarter of 2008. We remain confident for the long-term prospects of the
electronics industry, but it is difficult in the current environment to make
precise short term projections. We expect revenues between $640 million and $670
million for the fourth quarter of 2008, at flat gross margins. The expected
revenues have been negatively impacted by the strengthening of the U.S. dollar
compared to other currencies, principally the Euro. </FONT></P>
<P align=justify><FONT face=serif size=2>We have continued to see relatively
modest pricing pressure in 2008, continuing the trend experienced in 2006 and
2007, although we have experienced accelerating price declines for our
Semiconductors segment products, and expect increasing pricing pressure for the
remainder of the year. </FONT></P>
<P align=center><FONT face=serif size=2>40 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>Financial Metrics by Segment
</FONT></B></P>
<P align=justify><FONT face=serif size=2>The following table shows net revenues,
book-to-bill ratio, and gross profit margin broken out by segment for the five
quarters beginning with the third quarter of 2007 through the third quarter of
2008 </FONT><I><FONT face=serif size=2>(dollars in thousands):</FONT></I><FONT face=serif size=2> </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="66%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>3rd Quarter</FONT></B> </FONT></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>4th Quarter</FONT></B> </FONT></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>1st Quarter</FONT></B> </FONT></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>2nd Quarter</FONT></B> </FONT></TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%" colSpan=2><FONT size=+0><B><FONT face=serif size=2>3rd Quarter</FONT></B> </FONT></TD></TR>
  <TR>
    <TD noWrap align=left width="66%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><STRONG><FONT size=2>2007</FONT></STRONG> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><STRONG><FONT size=2>2007</FONT></STRONG> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><STRONG><FONT size=2>2008</FONT></STRONG> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><STRONG><FONT size=2>2008</FONT></STRONG> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><STRONG><FONT size=2>2008</FONT></STRONG> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><I><FONT face=serif size=2><U>Semiconductors</U></FONT></I> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Net revenues</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;400,967</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;386,013</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;387,780</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;407,443</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;392,934</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Book-to-bill ratio</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0.95</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0.94</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1.03</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1.01</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0.85</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Gross profit margin</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>23.3%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>22.5%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>22.9%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>22.5%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>21.8%</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><I><FONT face=serif size=2><U>Passive Components</U></FONT></I> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Net revenues</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>328,649</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>343,584</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>345,533</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>366,921</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>346,158</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Book-to-bill ratio</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1.02</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0.99</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1.05</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0.99</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0.98</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="66%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=right width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="66%" bgColor=#c0c0c0><FONT face=serif size=2>Gross profit margin</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>24.9%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>23.3%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>24.3%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>24.1%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>21.4%</FONT> </TD></TR></TABLE><BR>
<P align=justify><B><FONT face=serif size=2>Acquisition and Divestiture
Activity</FONT></B></P>
<P align=justify><FONT face=serif size=2>As part of our growth strategy, we seek
to expand through the acquisition of other manufacturers of electronic
components that have established positions in major markets, reputations for
product quality and reliability, and product lines with which we have
substantial marketing and technical expertise. This includes exploring
opportunities to acquire smaller targets to gain market share, effectively
penetrate different geographic markets, enhance new product development, round
out our product lines, or grow our high margin niche market businesses. Also as
part of this growth strategy, we seek to explore opportunities with privately
held developers of electronic components, whether through acquisition,
investment in non-controlling interests, or strategic alliances. </FONT></P>
<P align=justify><FONT face=serif size=2>During the third quarter of 2008,
Vishay made three acquisitions. On June 30, 2008, Vishay acquired its partner&#146;s
51% interest in a transducer manufacturing joint venture in India for
approximately $9.6 million. On July 23, 2008, Vishay acquired Powertron GmbH, a
manufacturer of specialty precision resistors, for approximately $14.3 million,
including the repayment of certain debt of Powertron. On September 15, 2008,
Vishay acquired the wet tantalum capacitor business of KEMET Corporation for
$35.2 million and other consideration in the form of a three-year term loan of
$15 million. Terms of the secured loan of $15 million to KEMET from Vishay
include a three-year non-amortizing maturity, an interest rate of LIBOR plus
four percent, and security consisting of accounts receivable. </FONT></P>
<P align=justify><FONT face=serif size=2>As further described in Note 13 to our
consolidated condensed financial statements, during the third quarter, Vishay
made an unsolicited offer to acquire all outstanding shares of International
Rectifier. This tender offer was terminated on October 13, 2008. Vishay incurred
$4 million of costs associated with the International Rectifier tender offer,
which are presented as a separate line item in the consolidated condensed
statements of operations. </FONT></P>
<P align=justify><FONT face=serif size=2>In April 2007, Vishay acquired the PCS
business of International Rectifier. On April 7, 2008, Vishay sold the
automotive modules and subsystems business unit (&#147;ASBU&#148;) it had acquired as part
of the acquisition of the PCS business. During the first quarter of 2008, we
recorded an impairment charge of $32.3 million to reduce the carrying value of
the net assets of ASBU to the selling price. </FONT></P>
<P align=justify><FONT face=serif size=2>Vishay has notified International
Rectifier of damage claims concerning forecasts provided to Vishay regarding
ASBU in advance of the PCS business acquisition that Vishay believes
International Rectifier knew to be unsupportable. Vishay has also notified
International Rectifier of certain other claims that it has regarding the sale
of the PCS business to Vishay. International Rectifier has stated that it does
not believe that Vishay&#146;s claims have merit and that it intends to vigorously
defend its position.</FONT></P>
<P align=center><FONT face=serif size=2>41 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>Cost Management </FONT></B></P>
<P align=justify><FONT face=serif size=2>We place a strong emphasis on reducing
our costs. Since 2001, we have been implementing aggressive cost reduction
programs to enhance our competitiveness, particularly in light of the erosion of
average selling prices of established products that is typical of the
industry.</FONT></P>
<P align=justify><FONT face=serif size=2>One way we have reduced costs is by
moving production to the extent possible from high-labor-cost markets, such as
the United States and Western Europe, to lower-labor-cost markets, such as the
Czech Republic, Israel, India, Malaysia, Mexico, the People&#146;s Republic of China,
and the Philippines. The percentage of our total headcount in lower-labor-cost
countries is a measure of the extent to which we are successful in implementing
this program. This percentage was 75.6% at the end of the third quarter of 2008,
compared to 74.0% at the end of 2007, 74.2% at the end of 2006, and 57% when
this program began in 2001. Our target is to have between 75% and 80% of our
headcount in lower-labor-cost countries.</FONT></P>
<P align=justify><FONT face=serif size=2>These production transfers and other
long-term cost cutting measures require us to initially incur significant
severance and other exit costs and to record losses on excess buildings and
equipment. We anticipate that we will realize the benefits of our restructuring
through lower labor costs and other operating expenses in future periods. Since
2001, we recorded over $225 million of restructuring and severance costs and
recorded related asset write-downs of over $80 million in order to reduce our
cost structure going forward. We have realized, and expect to continue to
realize, annual net cost savings associated with these restructuring activities.
</FONT></P>
<P align=justify><FONT face=serif size=2>Restructuring and severance costs, as
presented on the consolidated condensed statement of operations, are separate
from plant closure, employee termination and similar integration costs we incur
in connection with our acquisition activities. These plant closure and employee
termination costs subsequent to acquisitions are also integral to our cost
reduction program. These amounts, which were not significant in recent years,
are included in the costs of our acquisitions and do not affect earnings or
losses on our statement of operations.</FONT><B><FONT face=serif size=2>
</FONT></B></P>
<P align=justify><FONT face=serif size=2>We evaluate potential restructuring
projects based on an expected payback period. The payback period represents the
number of years of annual cost savings necessary to recover the initial cash
outlay for severance and other exit costs. In general, a restructuring project
must have a payback of less than 3 years to be considered beneficial. On
average, our restructuring projects have a payback of between 1 and 1.5 years.
</FONT></P>
<P align=justify><FONT face=serif size=2>During 2005 and the first quarter of
2006, we completed a broad-based fixed cost reduction program. In April 2005, we
began evaluating additional restructuring initiatives to improve the results of
underperforming divisions. Annual pretax savings resulting from restructuring
projects initiated under these programs were expected to be approximately $50
million, of which approximately 70% of the savings would reduce costs of
products sold, and approximately 30% of the savings would result in reduced
selling, general, and administrative costs. Our actual costs savings from these
programs in 2007 were approximately $40 million. Of this $40 million of
annualized savings, approximately $20 million began to be realized in 2006, and
$20 million began to be realized in 2007. We expect to realize an additional $10
million of savings from these programs in 2008. The expected and actual savings
quantified above are net of additional costs incurred after production was
transferred to lower-labor-cost regions. </FONT></P>
<P align=justify><FONT face=serif size=2>We expect these restructuring programs
to result in higher profitability through better gross margins and lower
selling, general, and administrative expenses. However, these programs to
improve our profitability also involve certain risks which could materially
impact our future operating results, as further detailed in Item 1A, &#147;Risk
Factors,&#148; included in our Annual Report on Form 10-K for the year ended December
31, 2007. </FONT></P>
<P align=center><FONT face=serif size=2>42 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>In light of the current uncertain
market conditions, we expanded our restructuring programs in 2008 to further
reduce costs. Most of the costs related to our anticipated 2008 restructuring
projects were recorded in the first quarter of 2008. These projects include the
transfer of production of resistor products from Brazil to India and Czech
Republic and the transfer of certain processes in Belgium and the United States
to third party subcontractors. We also announced our intention to transfer
production from the Netherlands and the United States to Israel later in 2008.
We expect to continue to incur restructuring expenses to reduce our fixed costs,
particularly in light of the current economic environment. We expect the
restructuring projects anticipated for 2008 (including those projects initiated
in the nine fiscal months ended September 27, 2008) will generate approximately
$25 million of annual cost savings, of which approximately 60% of the savings
would reduce costs of products sold, and approximately 40% of the savings would
result in reduced selling, general, and administrative costs. We began to
realize some of these savings in the third quarter of 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>While streamlining and reducing fixed
overhead, we are exercising caution so that we will not negatively impact our
customer service or our ability to further develop products and processes. Our
cost management plans also include expansion of certain critical capacities,
which we hope will reduce average materials and processing costs. </FONT></P>
<P align=justify><B><FONT face=serif size=2>Foreign Currency Translation
</FONT></B></P>
<P align=justify><FONT face=serif size=2>We are exposed to foreign currency
exchange rate risks, particularly due to transactions in currencies other than
the functional currencies of certain subsidiaries. While we have in the past
used forward exchange contracts to hedge a portion of our projected cash flows
from these exposures, we generally have not done so in recent periods.
</FONT></P>
<P align=justify><FONT face=serif size=2>Statement of Financial Accounting
Standards (&#147;SFAS&#148;) No. 52 requires that entities identify the &#147;functional
currency&#148; of each of their subsidiaries and measure all elements of the
financial statements in that functional currency. A subsidary&#146;s functional
currency is the currency of the primary economic environment in which it
operates. In cases where a subsidiary is relatively self-contained within a
particular country, the local currency is generally deemed to be the functional
currency. However, a foreign subsidiary that is a direct and integral component
or extension of the parent company&#146;s operations generally would have the parent
company&#146;s currency as its functional currency. Vishay has both situations among
its subsidiaries.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Foreign Subsidiaries which use
the Local Currency as the Functional Currency </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>We finance our operations in Europe and
certain locations in Asia in local currencies, and accordingly, these
subsidiaries utilize the local currency as their functional currency. For those
subsidiaries where the local currency is the functional currency, assets and
liabilities in the consolidated balance sheets have been translated at the rate
of exchange as of the balance sheet date. Translation adjustments do not impact
the results of operations and are reported as a separate component of
stockholders&#146; equity. With the general weakening of the U.S. dollar over the
past year, this translation of these subsidiaries&#146; financial statements into
U.S. dollars has resulted in a significant increase in the translation
adjustment recorded in accumulated other comprehensive income on our balance
sheet. As the U.S. dollar modestly strengthened in the third quarter, we saw a
moderate decrease in the translation adjustment recorded in accumulated other
comprehensive income on our balance sheet. See Note 7 to our consolidated
condensed financial statements. </FONT></P>
<P align=justify><FONT face=serif size=2>For those subsidiaries where the local
currency is the functional currency, revenues and expenses are translated at the
average exchange rate for the year. While the translation of revenues and
expenses into U.S. dollars does not directly impact the statement of operations,
the translation effectively increases or decreases the U.S. dollar equivalent of
revenues generated and expenses incurred in those foreign currencies. As a
result of the general weakening of the U.S. dollar versus several foreign
currencies, the translation of foreign currency revenues and expenses into U.S.
dollars has significantly increased reported revenues and expenses during the
nine fiscal months ended September 27, 2008. Expected general strengthening of
the U.S. dollar during the fourth quarter of 2008, as experienced in October, is
expected to reduce the U.S. dollar equivalent of revenues generated and expenses
incurred in foreign currencies, particularly the Euro.</FONT></P>
<P align=center><FONT face=serif size=2>43 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Foreign Subsidiaries which use
the U.S. Dollar as the Functional Currency </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Our operations in Israel and most
significant locations in Asia are largely financed in U.S. dollars, and
accordingly, these subsidiaries utilize the U.S. dollar as their functional
currency. For those foreign subsidiaries where the U.S. dollar is the functional
currency, all foreign currency financial statement amounts are remeasured into
U.S. dollars. Exchange gains and losses arising from remeasurement of foreign
currency-denominated monetary assets and liabilities are included in the results
of operations. While these subsidiaries transact most business in U.S. dollars,
they may have significant costs, particularly payroll-related, which are
incurred in the local currency. The cost of products sold and selling, general,
and administrative expense for the nine fiscal months ended September 27, 2008
have been significantly increased by local currency transactions of subsidiaries
which use the U.S. dollar as their functional currency, particularly our
subsidiaries in Israel. </FONT></P>
<P align=justify><B><FONT face=serif size=2>Critical Accounting Policies and
Estimates </FONT></B></P>
<P align=justify><FONT face=serif size=2>We supplement our discussion of
critical accounting policies and estimates, which appears in Item 7 of our
Annual Report on Form 10-K, as follows. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Goodwill </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Goodwill represents the excess of the
cost of businesses acquired over the fair value of the related net assets at the
date of acquisition. Goodwill is not amortized but rather tested for impairment
at least annually. We perform our annual impairment test as of the first day of
the fiscal fourth quarter. These impairment tests must be performed more
frequently if there are triggering events. </FONT></P>
<P align=justify><FONT face=serif size=2>SFAS No. 142, </FONT><I><FONT face=serif size=2>Goodwill and Other Intangible Assets, </FONT></I><FONT face=serif size=2>prescribes a two-step method for determining goodwill
impairment. In the first step, we determine the fair value of the reporting unit
using a comparable companies market multiple approach. The comparable companies
utilized in our evaluation are generally the members of our peer group included
in the presentation of our stock performance graph in Item 5 of our Annual
Report on Form 10-K. We also utilized other valuation techniques, including a
discounted cash flow analysis, to evaluate the reasonableness of the fair value
determined using the market multiple approach. </FONT></P>
<P align=justify><FONT face=serif size=2>If the net book value of the reporting
unit exceeds the fair value, we would then perform the second step of the
impairment test, which requires allocation of the reporting unit&#146;s fair value to
all of its assets and liabilities in a manner similar to a purchase price
allocation, with any residual fair value being allocated to goodwill. An
impairment charge will be recognized only when the implied fair value of a
reporting unit&#146;s goodwill is less than its carrying amount. </FONT></P>
<P align=justify><FONT face=serif size=2>In light of a sustained decline in
market capitalization for Vishay and its peer group companies, and other
factors, Vishay determined that an interim impairment test was necessary as of
the end of the second and third fiscal quarters of 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>Passive Components segment goodwill is
allocated to two reporting units for SFAS No. 142 evaluation purposes, namely
Other Passives and Measurements Group. The Semiconductors segment represents a
single reporting unit for SFAS No. 142 evaluation purposes.</FONT></P>
<P align=justify><FONT face=serif size=2>After completing step one of the
impairment test as of June 28, 2008, we determined that the estimated fair value
of our Semiconductors and Other Passives reporting units was less than the net
book value of those reporting units, requiring the completion of the second step
of the impairment test. The estimated fair value of the Measurements Group
reporting unit was greater than the net book value of that unit, and
accordingly, no second step was required for the Measurement Group reporting
unit.</FONT></P>
<P align=justify><FONT face=serif size=2>To measure the amount of the
impairment, SFAS No. 142 prescribes that we determine the implied fair value of
goodwill in the same manner as if we had acquired those business units.
Specifically, we must allocate the fair value of the reporting unit to all of
the assets of that unit, including any unrecognized intangible assets, in a
hypothetical calculation that would yield the implied fair value of goodwill.
The impairment loss is measured as the difference between the book value of the
goodwill and the implied fair value of the goodwill computed in step two.
</FONT></P>
<P align=center><FONT face=serif size=2>44 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Upon completion of a preliminary step
two analysis, we recorded our best estimate of the impairment loss as of June
28, 2008, which was refined during the third quarter of 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>Given the further deterioration of
market conditions, an additional impairment test was performed as of September
27, 2008. After completing step one of the impairment test as of September 27,
2008, we determined that the estimated fair value of our Other Passives
reporting unit was less than the net book value of this reporting unit. This
required the completion of the second step of the impairment test. The estimated
fair value of the Semiconductors and Measurements Group reporting units was
greater than the net book value of the respective reporting units as of
September 27, 2008, and accordingly, no second step was required for the
Semiconductors and Measurement Group reporting units at September 27, 2008.
</FONT></P>
<P align=justify><FONT face=serif size=2>As a result of these impairment tests,
we recorded goodwill impairment charges aggregating $1,130.9 million.
</FONT></P>
<P align=justify><FONT face=serif size=2>The third quarter impairment loss is
based on a preliminary step two analysis prepared as of September 27, 2008,
which is subject to completion in the fourth quarter of 2008. The completion of
this analysis may result in the recognition of an additional impairment charge
in the fourth quarter of 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>As a result of the analysis described
above, the goodwill associated with our Other Passives and Semiconductors
reporting units was recorded at fair value. In accordance with FASB Staff
Position No. 157-2</FONT><I><FONT face=serif size=2>, Effective Date of FASB
Statement No. 157</FONT></I><FONT face=serif size=2>, we have not applied SFAS
No. 157 to the determination of the fair value of these assets (see Note 14 to
our consolidated condensed financial statements included in Part I, Item 1).
However, the provisions of SFAS No. 157 were applied to the determination of the
fair value of financial assets and financial liabilities that were part of the
SFAS No. 142 step two analysis.</FONT></P>
<P align=justify><FONT face=serif size=2>The determination of the fair value of
the reporting units and the allocation of that value to individual assets and
liabilities within those reporting units requires the Company to make
significant estimates and assumptions. These estimates and assumptions primarily
include, but are not limited to: the selection of appropriate peer group
companies; control premiums appropriate for acquisitions in the industries in
which we compete; the discount rate; terminal growth rates; and forecasts of
revenue, operating income, depreciation and amortization, and capital
expenditures. The allocation requires several analyses to determine fair value
of assets and liabilities including, among others, completed technology,
tradenames, in-process research and development, customer relationships, and
certain property and equipment (valued at replacement costs). </FONT></P>
<P align=justify><FONT face=serif size=2>Due to the inherent uncertainty
involved in making these estimates, actual financial results could differ from
those estimates. In addition, changes in assumptions concerning future financial
results or other underlying assumptions would have a significant impact on
either the fair value of the reporting unit or the amount of the goodwill
impairment charge.</FONT></P>
<P align=justify><FONT face=serif size=2>The goodwill impairment charge is
noncash in nature and does not affect Vishay&#146;s liquidity, cash flows from
operating activities, or debt covenants, and will not have a material impact on
future operations. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Long-Lived Assets and
Indefinite-Lived Intangible Assets </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>We assess the impairment of our
long-lived assets, other than goodwill and tradenames, including property and
equipment, long-term prepaid assets, and identifiable intangible assets subject
to amortization, whenever events or changes in circumstances indicate the
carrying value may not be recoverable. Factors we consider important, which
could trigger an impairment review, include significant changes in the manner of
our use of the asset, changes in historical or projected operating performance,
and significant negative economic trends. The carrying value of a long-lived
asset is considered impaired when the total projected undiscounted cash flows
from such asset are separately identifiable and are less than the carrying
value. In that event, a loss is recognized based on the amount by which the
carrying value exceeds the fair market value of the long-lived asset, primarily
determined using discounted future cash flows. </FONT></P>
<P align=justify><FONT face=serif size=2>Indefinite-lived intangible assets
(which for Vishay are comprised entirely of tradenames) are not amortized, but
similar to goodwill, are tested for impairment at least annually. These tests
are performed more frequently if there are triggering events. The fair value of
the tradenames is measured as the discounted cash flow savings realized from
owning such tradenames and not having to pay a royalty for their use.
</FONT></P>
<P align=center><FONT face=serif size=2>45 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>As a result of the decision to close
our facility in Brazil, we completed a long-lived asset impairment analysis
during the first quarter of 2008 and determined that various fixed assets and
definite-lived intangible assets were impaired. We recorded fixed asset
write-downs of $3.4 million and intangible asset write-downs of $0.8
million.</FONT></P>
<P align=justify><FONT face=serif size=2>Prior to completing the interim
assessment of goodwill for impairment during the second quarter of 2008, we
performed a recoverability test of certain long-lived assets in accordance with
SFAS No. 144, </FONT><I><FONT face=serif size=2>Accounting for the Impairment or
Disposal of Long-Lived Assets,</FONT></I><FONT face=serif size=2> and certain
indefinite-lived intangible assets in accordance with SFAS No. 142. As a result
of those assessments, we recorded indefinite-lived intangible asset impairment
charges totaling $27 million during the third quarter of 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>The evaluation of the recoverability of
long-lived assets, and the determination of their fair value, requires us to
make significant estimates and assumptions. These estimates and assumptions
primarily include, but are not limited to: the identification of the asset group
at the lowest level of independent cash flows and the principal asset of the
group; the discount rate; terminal growth rates; and forecasts of revenue,
operating income, depreciation and amortization, and capital
expenditures.</FONT></P>
<P align=justify><FONT face=serif size=2>The evaluation of the fair value of
indefinite-lived trademarks also requires us to make significant estimates and
assumptions. These estimates and assumptions primarily include, but are not
limited to: the assumed market-royalty rate; the discount rate; terminal growth
rates; and forecasts of revenue.</FONT></P>
<P align=justify><FONT face=serif size=2>Due to the inherent uncertainty
involved in making these estimates, actual results could differ from those
estimates. In addition, changes in underlying assumptions would have a
significant impact on the conclusion that an asset group&#146;s carrying value is
recoverable, that an indefinite-lived asset is not impaired, or the
determination of any impairment charge if it was determined that the asset
values were indeed impaired.</FONT></P>
<P align=justify><B><FONT face=serif size=2>Results of Operations</FONT></B></P>
<P align=justify><FONT face=serif size=2>Statement of operations captions as a
percentage of net revenues and the effective tax rates were as follows:
</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"></TD>
    <TD noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B> </TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face=serif size=2>Cost of products sold</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>78.4%</FONT></B> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>76.0%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>77.2%</FONT></B> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>74.9%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"><FONT face=serif size=2>Gross
      profit</FONT> </TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>21.6%</FONT></B> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>24.0%</FONT> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>22.8%</FONT></B> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>25.1%</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face=serif size=2>Selling, general &amp; administrative expenses</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>15.3%</FONT></B> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>15.2%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>15.7%</FONT></B> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>15.7%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"><FONT face=serif size=2>Operating income
      (loss)</FONT> </TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>-43.6%</FONT></B> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>7.4%</FONT> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>-46.3%</FONT></B> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>8.7%</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face=serif size=2>Income (loss) from continuing operations</FONT> </TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>before taxes and minority interest</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>-45.2%</FONT></B> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>6.7%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>-47.2%</FONT></B> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>8.2%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"><FONT face=serif size=2>Income (loss)
      from continuing operations</FONT> </TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>-42.3%</FONT></B> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>5.1%</FONT> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>-46.2%</FONT></B> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>6.1%</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face=serif size=2>Net earnings (loss)</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>-42.3%</FONT></B> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>4.8%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>-48.0%</FONT></B> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>6.0%</FONT> </TD></TR>
  <TR>
    <TD noWrap align=left width="74%">________</TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"></TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face=serif size=2>Effective tax rate</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>6.3%</FONT></B> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>23.6%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>2.4%</FONT></B> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>24.7%</FONT> </TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>46 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Net Revenues </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Net revenues were as
follows</FONT><I><FONT face=serif size=2> (dollars in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"></TD>
    <TD noWrap align=center width="12%" colSpan=5><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B> </TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="12%" colSpan=5><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face=serif size=2>Net revenues</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 739,092</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 729,616</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 2,246,769</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp; 2,103,669</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"><FONT face=serif size=2>Change versus
      comparable prior year period</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>9,476</FONT> </TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>143,100</FONT>
    </TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face=serif size=2>Percentage change versus</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>comparable prior year period</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1.3%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>6.8%</FONT> </TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Changes in net revenues were
attributable to the following: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="90%"></TD>
    <TD noWrap align=center width="4%"><B><FONT face=serif size=2>vs. Prior
      Year</FONT></B> </TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="4%"><B><FONT face=serif size=2>vs.
      Prior</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=2>Quarter</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=2>Year-to-Date</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><B><FONT face=serif size=2>Change attributable to:</FONT></B> </TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%"><FONT face=serif size=2>Increase in
      volume</FONT> </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>1.6%</FONT> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>2.5%</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=serif size=2>Decrease in average selling prices</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>-3.4%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>-3.1%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%"><FONT face=serif size=2>Foreign currency
      effects</FONT> </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>3.1%</FONT> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>4.3%</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=serif size=2>Acquisitions</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>0.2%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>3.3%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%"><FONT face=serif size=2>Other</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>-0.2%</FONT> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>-0.2%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="90%" bgColor=#c0c0c0><FONT face=serif size=2>Net change</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1.3%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>6.8%</FONT>
</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>During the third quarter of 2008, we
have experienced a substantial slow down in our order rate. While sales volume
is higher for both the third quarter and fiscal nine months ended September 27,
2008, this is in part due to sales from our backlog. The markets for our
products, which had been relatively healthy through most of 2008, began to be
impacted by the economic downturn in September of 2008. The automotive industry
seems most heavily impacted, and sales of products for end-uses in the computer,
mobile phone, and consumer industries were below seasonal expectations. Sales of
products for end-uses in the industrial and military/aerospace industries
continued to be stable. The overall increase in net revenues for the nine fiscal
months ended September 27, 2008 was principally driven by acquisitions and
foreign currency effects. The weakening U.S. dollar effectively increased the
amount reported for revenues during the third quarter and nine fiscal months
ended September 27, 2008 versus the comparable prior year periods. </FONT></P>
<P align=justify><FONT face=serif size=2>We deduct, from the sales that we
record to distributors, allowances for future credits that we expect to provide
for returns, scrapped product, and price adjustments under various programs made
available to the distributors. We make deductions corresponding to particular
sales in the period in which the sales are made, although the corresponding
credits may not be issued until future periods. We estimate the deductions based
on sales levels to distributors, inventory levels at the distributors, current
and projected market trends and conditions, recent and historical activity under
the relevant programs, changes in program policies, and open requests for
credits. We recorded deductions from gross sales under our distributor incentive
programs of $60 million and $61 million for the nine fiscal months ended
September 27, 2008 and September 29, 2007, respectively, or 2.6% and 2.8% of
gross sales, respectively. Actual credits issued under the programs during the
nine fiscal months ended September 27, 2008 and September 29, 2007, were $57
million and $58 million, respectively. Increases and decreases in these
incentives are largely attributable to the then-current business
climate.</FONT></P>
<P align=justify><FONT face=serif size=2>As a result of a concentrated effort to
defend our intellectual property and generate additional licensing income, we
began receiving royalties in the fourth quarter of 2004. We continue to seek to
expand our royalty streams. Royalty revenues, included in net revenues on the
consolidated condensed statements of operations, were approximately $3.1 million
and $5.8 million for the nine fiscal months ended September 27, 2008 and
September 29, 2007, respectively. </FONT></P>
<P align=center><FONT face=serif size=2>47 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Gross Profit and Margins
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Gross profit margins for the fiscal
quarter and nine fiscal months ended September 27, 2008 were 21.6% and 22.8%,
respectively, versus 24.0% and 25.1%, respectively, for the comparable prior
year periods. These decreases in gross profit margin reflect lower average
selling prices, negative foreign currency effects, generally higher precious
metals and raw materials costs, and a less favorable product mix. When compared
to the nine fiscal months ended September 29, 2007, gross profit margin for the
nine fiscal months ended September 27, 2008 was also negatively impacted by the
acquisition of the PCS business, which has lower gross profit margins than
legacy Vishay products.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Segments </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Analysis of revenues and gross profit
margins for our Semiconductors and Passive Components segments is provided
below. </FONT></P>
<P align=justify><I><U><FONT face=serif size=2>Semiconductors</FONT></U></I><I><FONT face=serif size=2> </FONT></I></P>
<P align=justify><FONT face=serif size=2>Net revenues of the Semiconductors
segment were as follows</FONT><I><FONT face=serif size=2> (dollars in
thousands): </FONT></I></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="71%"></TD>
    <TD noWrap align=center width="16%" colSpan=7><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="12%" colSpan=5><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%" colSpan=3><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Net revenues</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;392,934<FONT size=3>
</FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;400,967<FONT size=3>
</FONT></FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,188,157<FONT size=3>
    </FONT></FONT></TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=2>$</FONT> </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,103,587<FONT size=3>
    </FONT></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%"><FONT face=serif size=2>Change versus
      comparable prior year period</FONT> </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>(8,033<FONT size=3> </FONT></FONT></TD>
    <TD noWrap align=left width="1%"><FONT size=2>)</FONT><FONT size=3>
    </FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="4%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>84,570<FONT size=3> </FONT></FONT></TD>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="4%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%" bgColor=#c0c0c0><FONT face=serif size=2>Percentage change versus</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="6%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="71%" bgColor=#c0c0c0>&nbsp;&nbsp;&nbsp;&nbsp;
      <FONT face=serif size=2>comparable prior year period</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>-2.0%<FONT size=3> </FONT></FONT></TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>7.7%<FONT size=3> </FONT></FONT></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="4%" bgColor=#c0c0c0></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Changes in Semiconductors segment net
revenues were attributable to the following: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"></TD>
    <TD noWrap align=center width="5%"><B><FONT face=serif size=2>vs. Prior
      Year</FONT></B> </TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="5%"><B><FONT face=serif size=2>vs.
      Prior</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=2>Quarter</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=2>Year-to-Date</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><B><FONT face=serif size=2>Change attributable to:</FONT></B> </TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="5%" bgColor=#c0c0c0></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Increase in
      volume</FONT> </TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>1.2%</FONT> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>4.5%</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Decrease in average selling prices</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-5.3%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-4.9%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Foreign currency
      effects</FONT> </TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>2.3%</FONT> </TD>
    <TD noWrap align=right width="2%">&nbsp;</TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>3.2%</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Acquisitions</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>0.0%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>5.4%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Other</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>-0.2%</FONT> </TD>
    <TD noWrap align=right width="2%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT face=serif size=2>-0.5%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Net change</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-2.0%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>7.7%</FONT>
</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Gross profit as a percentage of net
revenues for the Semiconductors segment was as follows: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"></TD>
    <TD noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B> </TD>
    <TD noWrap align=center width="2%"></TD>
    <TD noWrap align=center width="12%" colSpan=3><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%"><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="74%" bgColor=#c0c0c0><FONT face=serif size=2>Gross margin percentage</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>21.8%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>23.3%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>22.4%</FONT> </TD>
    <TD noWrap align=right width="2%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>24.2%</FONT> </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The decrease in gross margin
percentages for the third quarter and nine fiscal months ended September 27,
2008 versus the comparable prior year periods reflects accelerated average
selling price decline and generally higher precious metals and raw materials
costs. When compared to the nine fiscal months ended September 29, 2007, gross
profit margin for the nine fiscal months ended September 27, 2008 was also
negatively impacted by the acquisition of the PCS business, which has lower
gross profit margins than legacy Vishay products.</FONT></P>
<P align=center><FONT face=serif size=2>48 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><I><U><FONT face=serif size=2>Passive
Components</FONT></U></I><I><FONT face=serif size=2> </FONT></I></P>
<P align=justify><FONT face=serif size=2>Net revenues of the Passive Components
segment were as follows</FONT><I><FONT face=serif size=2> (dollars in
thousands): </FONT></I></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="81%">&nbsp; </TD>
    <TD noWrap align=center width="9%" colSpan=5><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="9%" colSpan=5><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%" colSpan=2><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="4%" colSpan=2><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0><FONT face=serif size=2>Net revenues</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>346,158</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>328,649</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>1,058,612</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>1,000,082</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%"><FONT face=serif size=2>Change versus
      comparable prior year period</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp;
</TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>17,509</FONT>
</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="3%"><FONT face=serif size=2>58,530</FONT>
</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="3%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0><FONT face=serif size=2>Percentage change versus</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="81%" bgColor=#c0c0c0>&nbsp; &nbsp;
      &nbsp;<FONT face=serif size=2>comparable prior year period</FONT>&nbsp;
</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>5.3%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="3%" bgColor=#c0c0c0><FONT face=serif size=2>5.9%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="3%" bgColor=#c0c0c0>&nbsp;
</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Changes in Passive Components segment
net revenues were attributable to the following: </FONT><BR></P>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="82%">&nbsp; </TD>
    <TD noWrap align=center width="8%"><B><FONT face=serif size=2>vs. Prior
      Year</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD noWrap align=center width="8%"><B><FONT face=serif size=2>vs.
      Prior</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%"><B><FONT face=serif size=2>Quarter</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="8%"><B><FONT face=serif size=2>Year-to-Date</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><B><FONT face=serif size=2>Change attributable to:</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp;</TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="8%" bgColor=#c0c0c0>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face=serif size=2>Increase
      (decrease) in volume</FONT>&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>2.0%</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>0.5%</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Decrease in average selling prices</FONT>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>-1.2%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>-1.2%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face=serif size=2>Foreign currency
      effects</FONT>&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>4.0%</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>5.5%</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Acquisitions</FONT>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>0.5%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>1.0%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%"><FONT face=serif size=2>Other</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>0.0%</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="8%"><FONT face=serif size=2>0.1%</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="82%" bgColor=#c0c0c0><FONT face=serif size=2>Net change</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>5.3%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>5.9%</FONT>
</TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Gross profit as a percentage of net
revenues for the Passive Components segment was as follows: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="80%">&nbsp; </TD>
    <TD noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp; </TD>
    <TD noWrap align=center width="9%" colSpan=3><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="4%"><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="80%" bgColor=#c0c0c0><FONT face=serif size=2>Gross margin percentage</FONT>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>21.4%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>24.9%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>23.2%</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>26.1%</FONT> </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>The decrease in gross margin percentage
for the third quarter and nine fiscal months ended September 27, 2008 versus the
comparable prior year period largely reflects negative foreign currency effects,
principally from changes in the Israeli shekel, Chinese renminbi, and Czech
koruna, which more than offset cost reduction initiatives. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Selling, General, and
Administrative Expenses </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Selling, general, and administrative
(&#147;SG&amp;A&#148;) expenses in 2008 have increased versus 2007 largely due to
increased sales. SG&amp;A expenses for the third quarter and nine fiscal months
ended September 27, 2008 were 15.3% and 15.7%, respectively, of net revenues,
versus 15.2% and 15.7% for the comparable prior year periods. Amortization of
intangible assets, included in SG&amp;A expenses, was $5.2 million and $14.9
million for the quarter and nine fiscal months ended September 27, 2008,
respectively, versus $4.3 million and $12.1 million, respectively, for the
comparable prior year periods. This increase in amortization expense is
principally due to the acquisition of the PCS business, and to a lesser extent,
PM Group. The nine fiscal months ended September 27, 2008 also includes higher
legal costs attributable to a patent infringement case. A weaker U.S. dollar and
increases in salaries and wages versus the prior year also contributed to the
increased level of SG&amp;A costs. Also, SG&amp;A expense for the quarter and
nine fiscal months ended September 27, 2008 are net of gains on sales of assets
totaling $2.5 million and $3.2 million, respectively, compared to a gain (loss)
on sales of assets of $(0.6) million and $0.7 million for the comparable prior
year periods.</FONT><B><I><FONT face=serif size=2> </FONT></I></B></P>
<P align=center><FONT face=serif size=2>49 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Restructuring and Severance Costs
and Related Asset Write-Downs </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Our restructuring programs have been
on-going since 2001. Our restructuring activities have been designed to reduce
both fixed and variable costs. These activities include the closing of
facilities and the termination of employees. Because costs are recorded based
upon estimates, actual expenditures for the restructuring activities may differ
from the initially recorded costs. If the initial estimates are too low or too
high, we could be required either to record additional expenses in future
periods or to reverse previously recorded expenses. We anticipate that we will
realize the benefits of our restructuring through lower labor costs and other
operating expenses in future periods. We continued our restructuring activities
during the nine fiscal months ended September 27, 2008, recording restructuring
and severance costs of $34.0 million, and related asset write-downs of $4.2
million. We expect to continue to incur restructuring expenses to reduce our
fixed costs, particularly in light of the current economic environment, as
further explained in &#147;Cost Management&#148; above, in Note 4 to our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 2007, and in Note 4 to our consolidated condensed financial
statements included in Part I of this document. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Other Income (Expense)
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Interest expense for the fiscal quarter
and nine fiscal months ended September 27, 2008 decreased by $2.6 million and
$4.5 million versus the comparable prior year periods. These decreases are
primarily due to the repayment of the convertible subordinated notes on August
1, 2008 and lower interest rates on our variable rate debt. </FONT></P>
<P align=justify><FONT face=serif size=2>The following tables analyze the
components of the line &#147;Other&#148; on the consolidated condensed statement of
operations <I>(in thousands): </I></FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="77%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>Fiscal quarter ended</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="4%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%">&nbsp; </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp; &nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>Change</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#c0c0c0><FONT face=serif size=2>Foreign exchange (loss) gain</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B>&nbsp;</TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>4,131</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(2,546</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>6,677</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Interest
      income</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>2,426</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>3,887</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(1,461</FONT>
</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp;
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#c0c0c0><FONT face=serif size=2>Dividend income</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>-</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>148</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(148</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Other</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><B><FONT face=serif size=2>296</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%"><FONT size=+0><FONT face=serif size=2>790</FONT> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%"><FONT face=serif size=2>(494</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>6,853</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>2,279</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>4,574</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=13>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD noWrap align=center width="15%" colSpan=7><B><FONT face=serif size=2>Nine fiscal months ended</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD>
    <TD noWrap align=center width="4%">&nbsp;</TD>
    <TD noWrap align=center width="1%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%">&nbsp; </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Sept. 27, 2008</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="7%" colSpan=3><B><FONT face=serif size=2>Sept. 29, 2007</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=3><B><FONT face=serif size=2>Change</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#c0c0c0><FONT face=serif size=2>Foreign exchange loss</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>$</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>(2,456</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><B><FONT face=serif size=2>)</FONT></B> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>(2,790</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>334</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Interest
      income</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>10,642</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>14,230</FONT>
</TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>(3,588</FONT>
</TD>
    <TD noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#c0c0c0><FONT face=serif size=2>Dividend income</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>92</FONT></B> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>368</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>(276</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>)</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%"><FONT face=serif size=2>Incentive from
      Chinese government</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="5%"><B><FONT face=serif size=2>800</FONT></B> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>-</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>800</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%" bgColor=#c0c0c0><FONT face=serif size=2>Other</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><B><FONT face=serif size=2>2,250</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>384</FONT>
</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1,866</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="77%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><B><FONT face=serif size=2>$</FONT></B>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><B><FONT face=serif size=2>11,328</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%"><FONT face=serif size=2>12,192</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>$</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%"><FONT face=serif size=2>(864</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%"><FONT face=serif size=2>)</FONT> </TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>50 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Income Taxes </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>The effective tax rate, based on income
from continuing operations before income taxes and minority interest, for the
quarter and nine fiscal months ended September 27, 2008 was 6.3% and 2.4%,
respectively, compared to 23.6% and 24.7%, respectively, for the comparable
prior year periods.</FONT></P>
<P align=justify><FONT face=serif size=2>The relatively low effective tax rates
for the quarter and nine fiscal months ended September 27, 2008 are principally
attributable to the goodwill and indefinite-lived intangible asset impairment
charges recorded in the second and third quarters. The vast majority of our
goodwill is not deductible for income tax purposes. We recognized tax benefits
of $29.1 million and $59.1 million during the third quarter and nine fiscal
months ended September 27, 2008, respectively, associated with the goodwill and
indefinite-lived intangible asset impairment charges. </FONT></P>
<P align=justify><FONT face=serif size=2>In connection with the repurchase of
the convertible subordinated notes on August 1, 2008, we repatriated
approximately $250 million of cash from non-U.S. subsidiaries. This repatriation
of cash resulted in net tax expense of approximately $9.9 million, recorded in
the third quarter of 2008, after the utilization of net operating losses and tax
credits.</FONT></P>
<P align=justify><FONT face=serif size=2>We operate in an international
environment with significant operations in various locations outside the United
States. Accordingly, the consolidated income tax rate is a composite rate
reflecting our earnings and the applicable tax rates in the various locations
where we operate. Part of our strategy is to achieve cost savings through the
transfer and expansion of manufacturing operations to countries where we can
take advantage of lower labor costs and available tax and other
government-sponsored incentives. Accordingly, our effective tax rate is
generally less than the U.S. statutory tax rate. Changes in the effective tax
rate are largely attributable to changes in the mix of pretax income among our
various taxing jurisdictions. </FONT></P>
<P align=justify><FONT face=serif size=2>The effective tax rates reflect the
fact that we could not recognize for accounting purposes the tax benefit of
losses incurred in certain jurisdictions, although these losses are available to
offset future taxable income. Under applicable accounting principles, we may not
recognize deferred tax assets for loss carryforwards in jurisdictions where
there is a recent history of cumulative losses, where there is no taxable income
in the carryback period, where there is insufficient evidence of future earnings
to overcome the loss history and where there is no other positive evidence, such
as the likely reversal of taxable temporary differences, that would result in
the utilization of loss carryforwards for tax purposes.</FONT></P>
<P align=justify><FONT face=serif size=2>During the nine fiscal months ended
September 27, 2008, the liabilities for unrecognized tax benefits decreased by a
net $7.6 million, due principally to the settlement of tax audits (approximately
$14.7 million), partially offset by increases for tax positions taken during the
period (approximately $5.4 million) and foreign currency effects (approximately
$1.9 million). </FONT></P>
<P align=justify><FONT face=serif size=2>Income tax expense for the nine fiscal
months ended September 29, 2007, includes additional tax expense of
approximately $3.3 million for changes in uncertain tax positions related to tax
positions taken in prior years. Income tax expense for the third quarter and
nine fiscal months ended September 29, 2007 reflects a benefit of $0.8 million,
representing the effects of adjusting deferred income taxes for a tax rate
decrease enacted in Germany.</FONT></P>
<P align=center><FONT face=serif size=2>51 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>Financial Condition, Liquidity, and
Capital Resources</FONT></B><FONT face=serif size=2> </FONT></P>
<P align=justify><FONT face=serif size=2>As more fully described in Note 6 to
the consolidated condensed financial statements in Item 1, on August 1, 2008,
Vishay repurchased substantially all of the convertible subordinated notes due
2023 for an aggregate purchase price of $498.1 million. The purchase price was
paid in cash and funded from approximately $250 million of cash on-hand, $125
million of borrowings under the revolving credit facility, and $125 million from
the term loan commitment. </FONT></P>
<P align=justify><FONT face=serif size=2>The following table summarizes the
components of net debt at September 27, 2008 and December 31, 2007
</FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="75%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>Sept. 27,</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=2>December 31,</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="5%" colSpan=2><B><FONT face=serif size=2>2008</FONT></B> </TD>
    <TD noWrap align=center width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="6%" colSpan=2><B><FONT face=serif size=2>2007</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Convertible subordinated notes, due 2023</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>1,870</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT> </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>500,000</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Exchangeable
      unsecured notes, due 2102</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>105,000</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>105,000</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Credit facility - revolving debt</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>125,000</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>-</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Credit facility
      - term loan</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>125,000</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>-</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Other debt</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>2,156</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>3,583</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%"><FONT face=serif size=2>Total
      debt</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif size=2>359,026</FONT>
    </TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="5%"><FONT face=serif size=2>608,583</FONT>
    </TD></TR>
  <TR>
    <TD width="99%" colSpan=6>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Cash</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="4%" bgColor=#c0c0c0><FONT face=serif size=2>312,021</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="5%" bgColor=#c0c0c0><FONT face=serif size=2>537,295</FONT> </TD></TR>
  <TR>
    <TD width="87%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="4%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="1%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" width="5%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="87%" bgColor=#c0c0c0><FONT face=serif size=2>Net debt</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>$</FONT>&nbsp;
      </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="4%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>47,005</FONT>
    </FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=left width="1%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>$</FONT>&nbsp;
      </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 2pt double" noWrap align=right width="5%" bgColor=#c0c0c0><FONT size=+0><FONT face=serif size=2>71,288</FONT>
    </FONT></TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Measurements such as &#147;net debt&#148; do not
have a uniform definition and are not recognized in accordance with generally
accepted accounting principles (&#147;GAAP&#148;). Such measures should not be viewed as
an alternative to GAAP measures of performance or liquidity. However, management
believes that an analysis of net debt assists investors in understanding aspects
of our cash and debt management. This measure, as calculated by Vishay, may not
be comparable to similarly titled measures used by other companies. </FONT></P>
<P align=justify><FONT face=serif size=2>The early extinguishment of the notes
will have a negligible impact on future net interest expense, as both interest
expense and interest income will decrease. </FONT></P>
<P align=justify><FONT face=serif size=2>We repatriated approximately $250
million of cash from our foreign subsidiaries in order to meet the obligation to
repurchase the convertible subordinated notes due 2023 pursuant to the option of
the holders on August 1, 2008. Substantially all of the September 27, 2008 cash
and cash equivalents balance was held by our non-U.S. subsidiaries. Although we
utilized cash and profits generated by our foreign subsidiaries to fund the
repurchase transaction, at the present time, we expect the remaining cash and
profits generated by foreign subsidiaries will continue to be reinvested
indefinitely. </FONT></P>
<P align=justify><FONT face=serif size=2>Our financial condition as of September
27, 2008 continued to be strong, with a current ratio (current assets to current
liabilities) of 2.6 to 1, as compared to 2.9 to 1 as of December 31, 2007. The
change in this ratio is principally due to a decrease in cash subsequent to the
repurchase of the convertible subordinated notes on August 1, 2008 and increases
in current maturities of debt due to the financing of a portion of that
repurchase using the term loan described in Note 6 to our consolidated condensed
financial statements. Our ratio of total debt to stockholders&#146; equity was 0.16
to 1 at September 27, 2008, as compared to 0.18 to 1 as of December 31, 2007.
The change in this ratio reflects both the reduction of debt subsequent to the
repurchase of the convertible subordinated notes and also the reduction of
equity resulting from to the noncash goodwill and indefinite-lived intangible
asset impairment charges recorded during the second and third quarters of
2008.</FONT></P>
<P align=center><FONT face=serif size=2>52 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Cash flows provided by continuing
operating activities were $191.2 million for the nine fiscal months ended
September 27, 2008, as compared to cash flows provided by operations of $210.4
million for the comparable prior year period. This decrease is principally due
to less favorable operating results (adjusted for noncash expenses and charges),
partially offset by smaller changes in net working capital during the nine
fiscal months ended September 27, 2008 versus the comparable prior year period.
</FONT></P>
<P align=justify><FONT face=serif size=2>Cash used by discontinued operating
activities of $10.4 million for the nine fiscal months ended September 27, 2008
primarily reflects receivables collected by Vishay and remitted to the purchaser
of the ASBU business pursuant to the transaction agreement. Cash provided by
discontinued investing activities reflects the proceeds of sale of the ASBU
business, net of capital spending for information technology systems.
</FONT></P>
<P align=justify><FONT face=serif size=2>Cash paid for property and equipment
for the nine fiscal months ended September 27, 2008 was $99.1 million, as
compared to $107.8 million for the fiscal quarter ended September 29, 2007. Our
total capital expenditures are projected to be between $150 million and $160
million for the full year 2008, principally to expand capacity in the
Semiconductors businesses. </FONT></P>
<P align=justify><FONT face=serif size=2>Cash paid for acquisitions for the nine
fiscal months ended September 27, 2008 totaled $73.9 million for the
acquisitions of our partner&#146;s 51% interest in a transducer manufacturing joint
venture, Powertron GmbH, and the KEMET wet tantalum business. This amount also
includes a $15 million loan extended to KEMET as part of the wet tantalum
business acquisition. Cash paid for acquisitions for the nine fiscal months
ended September 29, 2007 was $331.8 million, representing the acquisitions of
the PCS business and PM Group, net of cash acquired. Proceeds from sale of
businesses of $18.7 million include approximately $16.1 million from the sale of
PM Group&#146;s electrical contracting business. </FONT></P>
<P align=justify><FONT face=serif size=2>We maintain a credit facility, which
provides a revolving commitment of up to $250 million through April 20, 2012. As
more fully described in Note 6 to the consolidated condensed financial
statements, we entered into an amendment to this credit facility to also provide
a term loan commitment up to $125 million. This term loan commitment was drawn
in July 2008 to fund a portion of the repurchase of the convertible subordinated
notes and remains outstanding at September 27, 2008. We also utilized $125
million of our revolving credit facility to fund a portion of the repurchase of
the convertible subordinated notes, which also remains outstanding at September
27, 2008. At December 31, 2007, there were no amounts outstanding under the
credit facility.</FONT></P>
<P align=justify><FONT face=serif size=2>Interest on the credit facility is
payable at prime or other variable interest rate options. We are required to pay
facility commitment fees. The credit facility also restricts us from paying cash
dividends and requires us to comply with other covenants, including the
maintenance of specific financial ratios. We were in compliance with all
covenants at September 27, 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>Borrowings under the credit facility
are secured by pledges of stock in certain significant subsidiaries and certain
guarantees by significant subsidiaries. The subsidiaries would be required to
perform under the guarantees in the event that Vishay failed to make principal
or interest payments under the credit facility. Certain of our subsidiaries are
permitted to borrow under the credit facility. Any borrowings by these
subsidiaries under the credit facility are guaranteed by Vishay. </FONT></P>
<P align=justify><FONT face=serif size=2>As described above, we have utilized
the credit facility, including the new term loan commitment, to repurchase the
convertible subordinated notes in August 2008. The timing and location of
scheduled payments have also required us to draw on our revolving credit
facilities from time to time over the past year. While the timing and location
of scheduled payments for certain liabilities will require us to draw additional
amounts on our credit facility from time to time, for the next twelve months,
management expects that cash on-hand and cash flows from operations will be
sufficient to meet our normal operating requirements, to meet our obligations
under restructuring and acquisition integration programs, and to fund our
research and development and capital expenditure plans. Acquisition activity may
require additional borrowing under our credit facility or may otherwise require
us to incur additional debt.</FONT></P>
<P align=center><FONT face=serif size=2>53 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><FONT face=serif size=2>Economic Outlook and Impact on
Operations and Future Financial Results </FONT></B></P>
<P align=justify><FONT face=serif size=2>A worldwide financial crisis became
more pronounced and intensified significantly in September and October 2008.
This has resulted in significant volatility in capital and commodities markets,
decreased access to credit markets, and produced recessionary pressures through
most of the world&#146;s economies. </FONT></P>
<P align=justify><FONT face=serif size=2>We believe that Vishay has adequate
financial resources to weather a short-term recession, and we remain confident
for the long-term prospects for the electronics industry. However, the factors
driving the current economic crisis are different than in previous recessions,
and as a result, there is limited historical experience available to guide our
business strategy. </FONT></P>
<P align=justify><FONT face=serif size=2>The worldwide financial crisis will
have direct and indirect impacts on our business operations and the amounts
reported in our consolidated financial statements. Many of these impacts are
related to inherent risks of our business, as more fully described in Part I,
Item 1A, &#147;Risk Factors,&#148; of our Annual Report on Form 10-K for the year ended
December 31, 2007. Specifically, these impacts could include, but are not
limited to, the following: </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Orders, Revenues, and Margins
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>A decline in product demand on a global
basis could result in order cancellations and deferrals, lower total revenues,
and lower average selling prices. Our customers may cancel orders if business is
weak and their inventories are excessive. The prospect of a slowdown in demand
or recessionary trends in the global economy makes it more difficult for us to
predict our future sales and manage our operations. </FONT></P>
<P align=justify><FONT face=serif size=2>Declines in demand are driven by market
conditions in the end-use markets for our products. Changes in the demand mix,
needed technologies, and these end-use markets may adversely affect our ability
to match our products, inventory, and capacity to meet customer demand. This may
result in a material increase in excess or obsolete inventory and excess
capacity, which will reduce gross margins. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Prices of Raw
Materials</FONT></I></B><FONT face=serif size=2> </FONT></P>
<P align=justify><FONT face=serif size=2>The prices of certain raw materials
used in our products, particularly precious metals, are highly volatile. For
example, palladium, a metal used to produce certain capacitors, has fluctuated
in a range from $168 to $588 per troy ounce during 2008. From time-to-time, we
enter into purchase commitments to acquire these materials at fixed prices. For
periods when the prices of these materials are declining, we may be required to
record losses on adverse purchase commitments or write down our inventory
carrying costs for these raw materials, because 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 or committed purchase price, this write-down
could have a material adverse effect on our net earnings. For periods when the
prices of these materials are increasing, we may be unable to pass on the
increased cost to our customers, which would result in decreased margins for the
products in which these materials are used. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Collectibility of Accounts
Receivable </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Due to Vishay&#146;s large number of
customers and their dispersion across many countries and industries, we have
limited exposure to concentrations of credit risk. However, further
deterioration of economic conditions could result in customers defaulting on
payment or delaying payment, which could have a material impact on our cash
flows and results of operations. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Acquisitions </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>As part of our growth strategy, we seek
to expand through acquisition of other manufacturers of electronic components
that have established positions in major markets, reputations for product
quality and reliability, and product lines with which we have substantial
marketing and technical expertise. Our ability to identify suitable acquisition
targets and to successfully negotiate their acquisition may be limited.
Furthermore, our ability to finance the acquisition of suitable targets may be
limited, particularly in light of the current credit crisis. </FONT></P>
<P align=center><FONT face=serif size=2>54 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Access to Capital Markets
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>We presently have a revolving credit
facility with approximately $125 million of unused borrowing capacity. We also
have other committed and uncommitted lines of credit available on a short-term
basis in various countries around the world. In light of the current
environment, credit markets are functioning differently than in the past, with
key interest rate spreads increasing substantially, and banks tightening lending
standards. If Vishay were to require additional capital, either to sustain
normal operations or to pursue a strategic acquisition, we may be unable to
obtain financing on terms which we consider acceptable, if at all. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Interest Rates
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>We are exposed to changes in interest
rates as a result of our borrowing activities and our cash balances. Our credit
facility and our exchangeable notes due 2102 bear interest at variable rates
based on LIBOR. LIBOR has increased from approximately 2.8% at the end of June
2008 to 4.1% at the end of September 2008, and has fluctuated between 3.3% and
4.6% during October 2008. A significant increase in LIBOR would significantly
increase our interest expense. A general increase in interest rates would be
largely offset by an increase in interest income earned on our cash balances.
However, their can be no assurance that the interest rate earned on cash
balances will move in tandem with the interest rate paid on our variable-rate
debt.</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Impairment of Goodwill and
Long-Lived Assets </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>During 2008, we have recorded material
impairment charges to reduce the carrying value of our goodwill, certain
intangible assets, and certain property and equipment. These impairments are
generally measured based on expected future cash flows. A material decline in
market conditions could require us to assess whether or not our assets are
further impaired, and may require additional, material impairment charges.
</FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Capital Expenditures
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>To preserve cash, we might defer
capital expenditures. This could limit our new product introductions or our
ability to meet customer demands. When the economy rebounds, we may experience
intense demand for our products. During such future periods, we may not have
adequate manufacturing capacity, or we may have difficulty expanding our
manufacturing capacity, to satisfy future demand.</FONT><B><I><FONT face=serif size=2> </FONT></I></B></P>
<P align=justify><B><I><FONT face=serif size=2>Pension and Other Postretirement
Benefits </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Accounting for defined benefit pension
and other postretirement plans involves numerous assumptions and estimates. The
expected long-term rate of return on plan assets (for funded plans) and the
discount rate at which obligations could effectively be settled are two critical
assumptions in measuring the cost and benefit obligations of our pension and
other postretirement benefit plans. </FONT></P>
<P align=justify><FONT face=serif size=2>The expected return on plan assets is
incorporated into the computation of pension expense. The difference between
this expected return and the actual return on plan assets is deferred. The net
deferral of past asset losses (gains) affects the calculated value of plan
assets and, ultimately, future pension expense (income).</FONT></P>
<P align=justify><FONT face=serif size=2>Events in financial markets have led to
declines in the fair value of investment securities held by our pension plans.
In addition, negative investment returns could ultimately affect the funded
status of the plans, requiring additional cash contributions. </FONT></P>
<P align=center><FONT face=serif size=2>55 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><I><FONT face=serif size=2>Restructuring </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Due to the recessionary pressures, we
may be required to restructure our operations to reduce our cost structure and
to remain competitive. In such restructuring programs, we seek to eliminate
redundant facilities and staff positions and move operations, where possible, to
jurisdictions with lower labor costs. During this process, we may experience
under-utilization of certain plants in high-labor-cost regions and capacity
constraints in plants 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 increased depreciation costs in connection with the initiation or
expansion of production in lower-labor-cost regions. In addition, 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.</FONT><B><I><FONT face=serif size=2>
</FONT></I></B></P>
<P align=justify><B><I><FONT face=serif size=2>Income Taxes </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>We have recorded deferred tax assets
representing future tax benefits, but may not be able to generate sufficient
income to realize these future tax benefits in certain jurisdictions. A
sustained decline in economic conditions could affect the ultimate realizability
of these deferred tax assets.</FONT><B><I><FONT face=serif size=2>
</FONT></I></B></P>
<P align=justify><B><I><FONT face=serif size=2>Foreign Currency
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>Foreign currency exchange rates have
fluctuated significantly over the past year. We are exposed to foreign currency
exchange rate risks, particularly due to transactions in currencies other than
the functional currencies of certain subsidiaries. See also &#147;Foreign Currency
Translation&#148; above for additional discussion and analysis of the effects of
foreign currency. </FONT></P>
<P align=justify><B><FONT face=serif size=2>Contractual Commitments
</FONT></B></P>
<P align=justify><FONT face=serif size=2>Our Annual Report on Form 10-K includes
a table of contractual commitments as of December 31, 2007. Material changes to
these commitments which occurred in 2008 are described below. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Tower Purchase Commitments
</FONT></I></B></P>
<P align=justify><FONT face=serif size=2>We maintain long-term foundry
agreements with subcontractors to ensure access to external front-end capacity
for our semiconductor products. Our Siliconix division entered into an agreement
in 2004 with Tower Semiconductor (the &#147;2004 agreement&#148;), pursuant to which we
were required to place orders valued at approximately $200 million for the
purchase of semiconductor wafers to be manufactured in Tower&#146;s Fab 1 facility
over a seven to ten year period. During 2007, Siliconix was committed to
purchase approximately $22 million of semiconductor wafers, but did not meet its
commitments due to changing market demand for products manufactured using wafers
supplied by Tower. At December 31, 2007, the remaining future purchase
commitments under the 2004 agreement were approximately $160 million.</FONT></P>
<P align=justify><FONT face=serif size=2>In March 2008, Siliconix and Tower
entered into an amended and restated foundry agreement (the &#147;2008 agreement&#148;).
Pursuant to the 2008 agreement, Tower will continue to manufacture wafers
covered by the 2004 agreement, but at lower quantities and at lower prices,
through 2009. Tower will also begin manufacturing wafers for other product lines
acquired as part of the PCS acquisition through 2012, pending a scheduled
technology transfer. Siliconix must pay for any short-fall in the reduced
minimum order quantities specified under the 2008 agreement through the payment
of penalties equal to unavoidable fixed costs.</FONT></P>
<P align=justify><FONT face=serif size=2>Management estimates its minimum
purchase commitments under the 2008 agreement as follows </FONT><I><FONT face=serif size=2>(in thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face=serif size=2>2008</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>20,400</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%"><FONT face=serif size=2>2009</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>14,700</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face=serif size=2>2010</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>8,400</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%"><FONT face=serif size=2>2011</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="6%"><FONT face=serif size=2>8,800</FONT>
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="92%" bgColor=#c0c0c0><FONT face=serif size=2>2012</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="6%" bgColor=#c0c0c0><FONT face=serif size=2>8,800</FONT> </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Siliconix has granted Tower an option
to produce additional wafers under this agreement, as needed by Siliconix, and
accordingly, actual purchases from Tower may be greater than the commitments
disclosed above. </FONT></P>
<P align=center><FONT face=serif size=2>56 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>These purchase commitments are for the
manufacture of proprietary products using Siliconix-owned technology licensed to
Tower by Siliconix, and accordingly, management can only estimate the &#147;market
price&#148; of the wafers which are the subject of the 2008 agreement. Management
believes that these commitments are at prices that are not in excess of current
market prices. </FONT></P>
<P align=justify><B><I><FONT face=serif size=2>Long-term Debt and Interest
Payments on Long-term Debt </FONT></I></B></P>
<P align=justify><FONT face=serif size=2>On August 1, 2008, Vishay repurchased
substantially all of the convertible subordinated notes due 2023 for an
aggregate purchase price of $498.1 million. The purchase price was paid in cash
and funded from $250 million of cash on-hand, $125 million of borrowings under
the revolving credit facility, and $125 million from the term loan commitment.
</FONT></P>
<P align=justify><FONT face=serif size=2>Based on the debt outstanding at
September 27, 2008, future maturities of long-term debt and related interest
payments are estimated as follows </FONT><I><FONT face=serif size=2>(in
thousands)</FONT></I><FONT face=serif size=2>: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="75%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="78%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="9%" colSpan=2><B><FONT face=serif size=2>Debt</FONT></B> </TD>
    <TD noWrap align=center width="1%">&nbsp;&nbsp; &nbsp;&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=center width="11%"><B><FONT face=serif size=2>Interest</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#c0c0c0><FONT face=serif size=2>Remainder of 2008</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0><FONT face=serif size=2>$</FONT>&nbsp;</TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>419</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="11%" bgColor=#c0c0c0><FONT face=serif size=2>4,872</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"><FONT face=serif size=2>2009</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>25,345</FONT>
</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="11%"><FONT face=serif size=2>18,253</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#c0c0c0><FONT face=serif size=2>2010</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>25,047</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="11%" bgColor=#c0c0c0><FONT face=serif size=2>17,433</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"><FONT face=serif size=2>2011</FONT> </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>75,000</FONT>
</TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="11%"><FONT face=serif size=2>16,614</FONT>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%" bgColor=#c0c0c0><FONT face=serif size=2>2012</FONT> </TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0>&nbsp; </TD>
    <TD noWrap align=right width="8%" bgColor=#c0c0c0><FONT face=serif size=2>125,000</FONT> </TD>
    <TD noWrap align=right width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=right width="11%" bgColor=#c0c0c0><FONT face=serif size=2>8,918</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="78%"><FONT face=serif size=2>Thereafter</FONT>&nbsp; </TD>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD noWrap align=right width="8%"><FONT face=serif size=2>108,215</FONT>
    </TD>
    <TD noWrap align=right width="1%"></TD>
    <TD noWrap align=right width="11%"><FONT face=serif size=2>383,706</FONT>
    </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2>Commitments for interest payments on
long-term debt are based on the stated maturity dates of each agreement, one of
which bears a maturity date of 2102. Various factors could have a material
effect on the amount of future interest payments. These factors include the
facts that $105 million of our debt is exchangeable for common stock (although
the exchange ratio is based on a stock price which is substantially higher than
the current market price), and that the variable-rate debt included in the table
above are based on the rate prevailing at September 27, 2008. Commitments for
interest payments on long-term debt also include commitment fess under our
revolving credit facility, which expires in April 2012. </FONT></P>
<P align=justify><B><FONT face=serif size=2>Recent Accounting Pronouncements
</FONT></B></P>
<P align=justify><FONT face=serif size=2>As more fully described in Note 14 to
our consolidated condensed financial statements, several new accounting
pronouncements became effective in 2008 or will become effective in future
periods.</FONT></P>
<P align=justify><FONT face=serif size=2>The adoption of SFAS No. 141-R,
</FONT><I><FONT face=serif size=2>Business Combinations</FONT></I><FONT face=serif size=2>, effective January 1, 2009, will change the manner in which
Vishay accounts for acquisitions. While this new standard will impact all
companies, certain aspects of the new standard will have a particular impact on
Vishay. </FONT></P>
<P align=justify><FONT face=serif size=2>A primary tenet of our business
strategy is the expansion within the electronic components industry through the
acquisition of other manufacturers of electronic components that have
established positions in major markets, reputations for product quality and
reliability, and product lines with which we have substantial marketing and
technical expertise. Our acquisition strategy relies upon reducing selling,
general, and administrative expenses through the integration or elimination of
redundant sales offices and administrative functions at acquired companies, and
achieving significant production cost savings through the transfer and expansion
of manufacturing operations to countries where we can benefit from lower labor
costs and available tax and other government-sponsored incentives. </FONT></P>
<P align=justify><FONT face=serif size=2>Under present accounting standards,
plant closure and employee termination costs that we incur in connection with
our acquisition activities are included in the costs of our acquisitions and do
not affect earnings or losses on our statement of operations. SFAS No. 141-R
will require such costs to be recorded as expenses in our statement of
operations, as such expenses are incurred. </FONT></P>
<P align=center><FONT face=serif size=2>57 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>The adoption of FSP APB 14-1,
</FONT><I><FONT face=serif size=2>Accounting for Convertible Debt Instruments
That May be Settled in Cash upon Conversion (including partial cash
settlement)</FONT></I><FONT face=serif size=2> on January 1, 2009 will require
retroactive restatement of interest expense for the years ended December 31,
2007 and 2008. For Vishay, this would represent imputed interest expense related
to the convertible subordinated notes due 2023, which were substantially all
repurchased in August 2008. The impact of FSP APB 14-1 on the remaining
outstanding convertible notes is expected to be immaterial to future periods.
Vishay will report an increase in interest expense associated with these notes
for the full year of 2007 and the first three quarters of 2008. We are presently
evaluating the quantitative impact of adoption of the FSP. </FONT></P>
<P align=justify><FONT face=serif size=2>Except as described above, the adoption
of the new standards described in Note 14 to our consolidated condensed
financial statements is not expected to have a material effect on our financial
position, results of operations, or liquidity. </FONT></P>
<P align=justify><B><FONT face=serif size=2>Safe Harbor Statement
</FONT></B></P>
<P align=justify><FONT face=serif size=2>From time to time, information provided
by us, including but not limited to statements in this report, or other
statements made by or on our behalf, may contain &#147;forward-looking&#148; information
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements involve a number of risks, uncertainties, and contingencies, many of
which are beyond our control, which may cause actual results, performance, or
achievements to differ materially from those anticipated.</FONT></P>
<P align=justify><FONT face=serif size=2>Such statements are based on current
expectations only, and are subject to certain risks, uncertainties, and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, or projected. Among the factors
that could cause actual results to materially differ include: general business
and economic conditions, particularly in the markets that we serve; difficulties
in integrating acquired companies, the inability to realize anticipated
synergies and expansion possibilities, and other unanticipated conditions
adversely affecting the operation of these companies; difficulties in new
product development;</FONT><B><FONT face=serif size=2> </FONT></B><FONT face=serif size=2>changes in competition and technology in the markets that we
serve and the mix of our products required to address these changes; an
inability to attract and retain highly qualified personnel, particularly in
respect of our acquired businesses; changes in foreign currency exchange rates;
difficulties in implementing our cost reduction strategies such as labor unrest
or legal challenges to our lay-off or termination plans, underutilization of
production facilities in lower-labor-cost countries, operation of redundant
facilities due to difficulties in transferring production to lower-labor-cost
countries;</FONT><B><FONT face=serif size=2> </FONT></B><FONT face=serif size=2>and other factors affecting our operations, markets, products, services,
and prices that are set forth in our Annual Report on Form 10-K for the year
ended December 31, 2007, filed with the Securities and Exchange Commission (the
&#147;SEC&#148;). We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise.</FONT></P>
<P align=center><FONT face=serif size=2>58 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><B><U><FONT face=serif size=2>Item 3</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><B><U><FONT face=serif size=2>Quantitative and
Qualitative Disclosures About Market Risk</FONT></U></B><B><FONT face=serif size=2> </FONT></B><FONT face=serif size=2></FONT></P>
<P align=justify><FONT face=serif size=2>We are exposed to changes in interest
rates as a result of our borrowing activities and our cash balances. </FONT></P>
<P align=justify><FONT face=serif size=2>We had no interest rate exposure to our
convertible subordinated notes, as the interest payable on these notes was
fixed. On August 1, 2008, we repurchased substantially all of the convertible
subordinated notes for an aggregate purchase price of $498.1 million. We
utilized approximately $250 million of cash on-hand, $125 million borrowed under
the revolving credit commitment under our credit facility, and $125 million from
a new term loan under the credit facility to fund the purchase price.
</FONT></P>
<P align=justify><FONT face=serif size=2>We are exposed to changes in interest
rates on our credit facility. At December 31, 2007, there were no amounts
outstanding under the credit facility. At September 27, 2008, we had $125
million outstanding under the revolving credit facility and $125 million
outstanding under the term loan facility, due to the repurchase of the
convertible subordinated notes. Cash utilized under the revolving credit
facility for the repurchase of the convertible subordinated notes bears interest
at LIBOR plus 1.00%, and cash utilized under the term loan commitment for the
repurchase of the convertible subordinated notes bears interest at LIBOR plus
2.50%. </FONT></P>
<P align=justify><FONT face=serif size=2>At September 27, 2008 and December 31,
2007, we had cash totaling $312.0 million and $537.3 million, respectively. Our
cash balance was reduced by approximately $250 million by the repurchase of the
convertible subordinated notes in August 2008. </FONT></P>
<P align=justify><FONT face=serif size=2>We are also exposed to interest rate
changes with respect to our variable rate exchangeable notes, which bear
interest at LIBOR, reset quarterly. The aggregate principal amount of the
exchangeable notes is $105 million. </FONT></P>
<P align=justify><FONT face=serif size=2>Based on the debt and cash positions at
September 27, 2008, we would expect a 50 basis point increase or decrease in
interest rates to increase or decrease our annualized net earnings by
approximately $0.6 million. </FONT></P>
<P align=justify><FONT face=serif size=2>See Note 6 to our consolidated
financial statements, included in our annual report on Form 10-K, and Note 6 to
our consolidated condensed financial statements included in Item 1 of this
quarterly report on Form 10-Q for additional information about our long-term
debt. </FONT></P>
<P align=justify><FONT face=serif size=2>See &#147;Economic Outlook and Impact on
Operations and Future Financial Results&#148; included in Item 2, &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations&#148; for
additional discussion of market risks. </FONT></P>
<P align=justify><FONT face=serif size=2>Except as described above, there have
been no material changes in the market risks previously disclosed in Part II,
Item 7A, &#147;Quantitative and Qualitative Disclosures About Market Risk,&#148; of our
Annual Report on Form 10-K for the year ended December 31, 2007, filed with the
SEC on February 27, 2008. </FONT></P>
<P align=justify><B><U><FONT face=serif size=2>Item 4</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><B><U><FONT face=serif size=2>Controls and
Procedures</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><B><FONT face=serif size=2>Conclusion Regarding the
Effectiveness of Disclosure Controls and Procedures </FONT></B></P>
<P align=justify><FONT face=serif size=2>An evaluation was performed under the
supervision and with the participation of our management, including the Chief
Executive Officer (&#147;CEO&#148;) and Chief Financial Officer (&#147;CFO&#148;), of the
effectiveness of the design and operation of our disclosure controls and
procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as amended (the &#147;Exchange
Act&#148;). Based on that evaluation, our CEO and CFO concluded that our disclosure
controls and procedures were effective as of the end of the period covered by
this quarterly report to ensure that information required to be disclosed in
reports that we file or submit under the Exchange Act are: (1) recorded,
processed, summarized, and reported within the time periods specified in the
SEC&#146;s rules and forms; and (2) accumulated and communicated to our management,
including our CEO and CFO, as appropriate to allow timely decisions regarding
required disclosure.</FONT><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><B><FONT face=serif size=2>Changes in Internal Control Over
Financial Reporting </FONT></B></P>
<P align=justify><FONT face=serif size=2>There were no changes in our internal
control over financial reporting during the period covered by this report that
have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting. </FONT></P>
<P align=center><FONT face=serif size=2>59 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=center><B><FONT face=serif size=2>PART II - OTHER INFORMATION
</FONT></B></P>
<P align=justify><B><U><FONT face=serif size=2>Item 1</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><B><U><FONT face=serif size=2>Legal
Proceedings</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>Not applicable. </FONT></P>
<P align=justify><B><U><FONT face=serif size=2>Item 1A</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><B><U><FONT face=serif size=2>Risk
Factors</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>See &#147;Economic Outlook and Impact on
Operations and Future Financial Results&#148; included in Item 2, &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations&#148; for
additional discussion and analysis of market risks, which is hereby incorporated
by reference. </FONT></P>
<P align=justify><FONT face=serif size=2>Except as incorporated by reference
above, there have been no material changes from the risk factors previously
disclosed in Part I, Item 1A, &#147;Risk Factors,&#148; of our Annual Report on Form 10-K
for the year ended December 31, 2007, filed with the SEC on February 27, 2008.
</FONT></P>
<P align=justify><B><U><FONT face=serif size=2>Item 2</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><B><U><FONT face=serif size=2>Unregistered Sales
of Equity Securities and Use of Proceeds</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>Not applicable. </FONT></P>
<P align=justify><B><U><FONT face=serif size=2>Item 3</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><B><U><FONT face=serif size=2>Defaults Upon
Senior Securities</FONT></U></B><FONT face=serif size=2> </FONT></P>
<P align=justify><FONT face=serif size=2>Not applicable. </FONT></P>
<P align=justify><B><U><FONT face=serif size=2>Item 4</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><B><U><FONT face=serif size=2>Submission of
Matters to a Vote of Security Holders</FONT></U></B><B><FONT face=serif size=2>
</FONT></B></P>
<P align=justify><FONT face=serif size=2>None. </FONT></P>
<P align=justify><B><U><FONT face=serif size=2>Item 5</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><B><U><FONT face=serif size=2>Other
Information</FONT></U></B><B><FONT face=serif size=2> </FONT></B></P>
<P align=justify><FONT face=serif size=2>Not applicable. </FONT></P>
<P align=center><FONT face=serif size=2>60 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P><STRONG><FONT size=2><U>Item 6</U><FONT face=serif>.</FONT></FONT></STRONG>&nbsp;<STRONG><U><FONT size=2>Exhibits</FONT></U></STRONG></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=justify width="1%"><FONT face=serif size=2>2.1</FONT></TD>
    <TD vAlign=top noWrap align=justify width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top align=justify width="97%"><FONT face=serif size=2>Asset
      Purchase Agreement dated as of September 15, 2008, by and between KEMET
      Electronics Corporation (a wholly-owned subsidiary of KEMET Corporation)
      and Siliconix Technology C.V. (a wholly-owned subsidiary of Vishay
      Intertechnology, Inc.).</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=justify width="1%"><FONT face=serif size=2>10.1</FONT></TD>
    <TD vAlign=top noWrap align=justify width="1%"></TD>
    <TD vAlign=top align=justify width="97%"><FONT face=serif size=2>Loan
      Agreement dated as of September 15, 2008, between KEMET Electronics
      Corporation and Vishay Intertechnology, Inc.</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=justify width="1%"><FONT face=serif size=2>10.2</FONT></TD>
    <TD vAlign=top noWrap align=justify width="1%"></TD>
    <TD vAlign=top align=justify width="97%"><FONT face=serif size=2>Pledge
      and Security Agreement dated as of September 15, 2008 made by KEMET
      Electronics Corporation in favor of Vishay Intertechnology,
  Inc.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=justify width="1%">&nbsp; </TD>
    <TD vAlign=top noWrap align=justify width="1%"></TD>
    <TD vAlign=top align=justify width="97%"><FONT face=serif size=2></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=justify width="1%"><FONT face=serif size=2>31.1</FONT></TD>
    <TD vAlign=top noWrap align=justify width="1%"></TD>
    <TD vAlign=top align=justify width="97%"><FONT face=serif size=2>Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the
      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002 - Dr. Gerald Paul, Chief Executive
      Officer.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=justify width="1%">&nbsp; </TD>
    <TD vAlign=top noWrap align=justify width="1%"></TD>
    <TD vAlign=top align=justify width="97%"><FONT face=serif size=2></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=justify width="1%"><FONT face=serif size=2>31.2</FONT></TD>
    <TD vAlign=top noWrap align=justify width="1%"></TD>
    <TD vAlign=top align=justify width="97%"><FONT face=serif size=2>Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the
      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002 - Dr. Lior E. Yahalomi, Chief Financial
      Officer.</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=justify width="1%">&nbsp; </TD>
    <TD vAlign=top noWrap align=justify width="1%"></TD>
    <TD vAlign=top align=justify width="97%"><FONT face=serif size=2></FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=justify width="1%"><FONT face=serif size=2>32.1</FONT></TD>
    <TD vAlign=top noWrap align=justify width="1%"></TD>
    <TD vAlign=top align=justify width="97%"><FONT face=serif size=2>Certification Pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 &#150; Dr. Gerald
      Paul, Chief Executive Officer.</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top noWrap align=justify width="1%"><FONT face=serif size=2>32.2</FONT></TD>
    <TD vAlign=top noWrap align=justify width="1%"></TD>
    <TD vAlign=top align=justify width="97%"><FONT face=serif size=2>Certification Pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 &#150; Dr. Lior E.
      Yahalomi, Chief Financial Officer.</FONT></TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>61 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=center><B><FONT face=serif size=2>SIGNATURES</FONT></B></P>
<P align=justify><FONT face=serif size=2>Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.</FONT></P>
<DIV align=right>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD align=left width="100%" colSpan=2><FONT face=serif size=2>VISHAY
      INTERTECHNOLOGY, INC.</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="50%"><FONT face=serif size=2>/s/ Lior E. Yahalomi</FONT>&nbsp; </TD>
    <TD align=left width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="100%" colSpan=2><FONT face=serif size=2>Dr. Lior E.
      Yahalomi</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="100%" colSpan=2><FONT face=serif size=2>Executive
      Vice President and Chief Financial Officer</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="100%" colSpan=2><FONT face=serif size=2>(as a duly
      authorized officer and principal financial officer)</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD width="100%" colSpan=2>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" align=left width="50%"><FONT face=serif size=2>/s/ Lori Lipcaman</FONT>&nbsp; </TD>
    <TD align=left width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="100%" colSpan=2><FONT face=serif size=2>Lori
      Lipcaman</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="100%" colSpan=2><FONT face=serif size=2>Executive
      Vice President and Chief Accounting Officer</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="100%" colSpan=2><FONT face=serif size=2>(as a duly
      authorized officer and principal accounting officer)</FONT>&nbsp;
  </TD></TR></TABLE></DIV><BR>
<P align=justify><FONT face=serif size=2>Date:&nbsp;&nbsp;&nbsp;&nbsp; November
4, 2008</FONT></P>
<P align=center><FONT face=serif size=2>62</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>2
<FILENAME>exhibit2-1.htm
<DESCRIPTION>ASSET PURCHASE AGREEMENT DATED AS OF SEPTEMBER 15, 2008
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">

<P align=right><B><FONT face=serif size=2>Exhibit 2.1</FONT></B></P>
<P align=center><B><FONT face=serif size=2>ASSET PURCHASE
AGREEMENT</FONT></B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>ASSET PURCHASE AGREEMENT (the &#147;</FONT><U><FONT face=serif size=2>Agreement</FONT></U><FONT face=serif size=2>&#148;), dated as of September 15,
2008, by and between KEMET Electronics Corporation (&#147;</FONT><U><FONT face=serif size=2>Seller</FONT></U><FONT face=serif size=2>&#148;), a Delaware corporation and a
wholly-owned subsidiary of KEMET Corporation (&#147;</FONT><U><FONT face=serif size=2>Seller Guarantor</FONT></U><FONT face=serif size=2>&#148;) and Siliconix
Technology C.V. (&#147;</FONT><U><FONT face=serif size=2>Buyer</FONT></U><FONT face=serif size=2>&#148;), a company organized under the laws of the Netherlands and
a wholly-owned subsidiary of Vishay Intertechnology, Inc. (&#147;</FONT><U><FONT face=serif size=2>Buyer Guarantor</FONT></U><FONT face=serif size=2>&#148;).
Capitalized terms used herein have the meanings set forth in </FONT><U><FONT face=serif size=2>Exhibit A</FONT></U><FONT face=serif size=2>
hereto.</FONT></P>
<P align=center><FONT face=serif size=2>RECITALS</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>WHEREAS, Seller is engaged in the business of developing,
manufacturing, distributing and selling wet tantalum capacitors (the
&#147;</FONT><U><FONT face=serif size=2>Business</FONT></U><FONT face=serif size=2>&#148;).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>WHEREAS, Seller owns certain inventory located in Matamoros,
Tamaulipas, Mexico and Ciudad Victoria, Tamaulipas, Mexico, owns certain
machinery, equipment, tooling and other personal tangible property located in
Matamoros, Mexico and Victoria, Mexico, and owns certain intellectual property,
all used in the Business.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>WHEREAS, Buyer and Seller desire that Buyer purchase from
Seller, and that Seller sell to Buyer, certain operating and intangible assets
used in the Business on the terms and conditions set forth herein.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>WHEREAS, simultaneously with the execution of this Agreement,
Buyer and Seller are entering into (i) that certain Loan Agreement, dated the
date hereof (the &#147;</FONT><U><FONT face=serif size=2>Loan
Agreement</FONT></U><FONT face=serif size=2>&#148;), pursuant to which Buyer is
lending to Seller $15,000,000 on the terms and subject to the conditions set
forth in the Loan Agreement, (ii) that certain Transition Services Agreement,
dated the date hereof (the &#147;</FONT><U><FONT face=serif size=2>Transition
Services Agreement</FONT></U><FONT face=serif size=2>&#148;), pursuant to which
Seller will provide Buyer with certain services relating to the Business, and
(iii) that certain Commodatum Agreement, dated as of the date hereof (the
&#147;</FONT><U><FONT face=serif size=2>Commodatum Agreement</FONT></U><FONT face=serif size=2>&#148;) to be executed by Seller and its Mexican subsidiaries with
respect to the Transferred Assets in order to fulfill its obligations under the
Transition Services Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>WHEREAS, concurrently with the execution and delivery of this
Agreement, and as a condition to Seller&#146;s willingness to enter into this
Agreement, Buyer Guarantor has agreed fully and unconditionally to guarantee the
representations, warranties, covenants, agreements and other obligations of
Buyer in this Agreement (the &#147;</FONT><U><FONT face=serif size=2>Buyer
Guarantee</FONT></U><FONT face=serif size=2>&#148;).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>WHEREAS, concurrently with the execution and delivery of this
Agreement, and as a condition to Buyer&#146;s willingness to enter into this
Agreement, Seller Guarantor has agreed fully and unconditionally to guarantee
the representations, warranties, covenants, agreements and other obligations of
Seller in this Agreement (the &#147;</FONT><U><FONT face=serif size=2>Seller
Guarantee</FONT></U><FONT face=serif size=2>&#148;).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>NOW, THEREFORE, in consideration of the foregoing premises and
of the mutual covenants, representations, warranties and agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=center><B><FONT face=serif size=2>ARTICLE I</FONT></B></P>
<P align=center><B><FONT face=serif size=2>PURCHASE AND SALE</FONT></B></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
1.01.</STRONG></FONT><STRONG><FONT face=sans-serif> </FONT><U><FONT face=serif size=2>Purchase and Sale of Assets</FONT></U><FONT face=serif size=2>.</FONT></STRONG></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>On the terms and conditions set forth herein, at the Closing as described
in Article II hereto, Buyer shall purchase from Seller, and Seller shall (or
with respect to the Arco Intellectual Property owned by Seller&#146;s wholly-owned
subsidiary Arcotronics Italia S.p.A. or Arcotronics Limited, a wholly-owned
subsidiary of Arcotronics Italia (Arcotronics Italia S.p.A and Arcotronics
Limited collectively, &#147;</FONT><U><FONT face=serif size=2>Arcotronics</FONT></U><FONT face=serif size=2>&#148;), shall cause Arcotronics
to) irrevocably sell, transfer, convey, assign and deliver to Buyer (or one or
more direct or indirect wholly-owned subsidiaries of Buyer Guarantor as Buyer
may designate), good and valid title to, and all rights, title and interests of
Seller (or, with respect to the Arco Intellectual Property owned by Arcotronics,
all rights, title and interests of Arcotronics) in and to the following
property, free and clear of all liens, charges, pledges, security interests,
encumbrances, restrictions and claims of any nature whatsoever other than
Permitted Liens (collectively, the &#147;</FONT><U><FONT face=serif size=2>Transferred Assets</FONT></U><FONT face=serif size=2>&#148;): </FONT></P>
<DIV style="PADDING-LEFT: 30pt">
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(i)
</FONT><FONT face=serif size=2>all of Seller&#146;s rights with respect to the
customer orders of Inventory set forth on </FONT><U><FONT face=serif size=2>Schedule 1.01(a)(i)</FONT></U><FONT face=serif size=2>;</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(ii)</FONT><FONT face=sans-serif>
</FONT><FONT face=serif size=2>the Inventory;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iii)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>the
Intellectual Property listed on <U>Schedule 1.01(a)(iii)</U> and the
Intellectual Property, to the extent such exists, reflected in the documents
listed on </FONT><U><FONT face=serif size=2>Schedule A</FONT></U><FONT face=serif size=2> (the &#147;</FONT><U><FONT face=serif size=2>Transferred Core
Intellectual Property</FONT></U><FONT face=serif size=2>&#148;); </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iv)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>the Arco
Intellectual Property and the Intellectual Property, to the extent such exists,
reflected in the documents listed on </FONT><U><FONT face=serif size=2>Schedule
B</FONT></U><FONT face=serif size=2> (together, with the Transferred Core
Intellectual Property, the &#147;</FONT><U><FONT face=serif size=2>Transferred
Intellectual Property</FONT></U><FONT face=serif size=2>&#148;);</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(v)</FONT><FONT face=sans-serif>
</FONT><FONT face=serif size=2>the Tangible Personal Property;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(vi)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>the
Transferred Agreements and all rights of Seller under any confidentiality or
similar agreement entered into with any employee of Seller relating to the
Business; and</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(vii) All
part number lists, design drawings, design specifications, packaging designs,
product engineering designs and engineering documents, written processes,
written methodologies, written formulae, written algorithms, written technical
information, marketing data, import manifests, certificates of origin, invoices
of the assets located in Matamoros and Cuidad Victoria, Tamaulipas, Mexico,
business and financial records, files, books and records, and the documents
listed on </FONT><U><FONT face=serif size=2>Schedule A</FONT></U><FONT face=serif size=2> and </FONT><U><FONT face=serif size=2>Schedule
B</FONT></U><FONT face=serif size=2>, in each case, specifically relating to the
products set forth on </FONT><U><FONT face=serif size=2>Schedule
3.05(a)(i)</FONT></U><FONT face=serif size=2> and </FONT><U><FONT face=serif size=2>Schedule 3.05(a)(ii)</FONT></U><FONT face=serif size=2> or the Business
and any records listed on </FONT><U><FONT face=serif size=2>Schedule
1.01(a)(vii)</FONT></U><FONT face=serif size=2>.</FONT></P></DIV>
<P align=center><FONT face=serif size=2>2</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>Notwithstanding anything contained in this Agreement to the contrary, the
following rights, properties and assets of Seller (the &#147;</FONT><U><FONT face=serif size=2>Excluded Assets</FONT></U><FONT face=serif size=2>&#148;) shall not
be included in the Transferred Assets:</FONT></P>
<DIV style="PADDING-LEFT: 30pt">
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(i)
</FONT><FONT face=serif size=2>all rights of Seller under this Agreement and the
Ancillary Agreements and the instruments and agreements delivered to Seller by
Buyer pursuant to this Agreement;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(ii)
</FONT><FONT face=serif size=2>rights with respect to agreements other than
Transferred Agreements;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iii)
</FONT><FONT face=serif size=2>cash and cash equivalents, bank accounts,
deposits and other financial assets;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iv)
</FONT><FONT face=serif size=2>except as otherwise set forth in the Trademark
License Agreement, the names &#147;KEMET,&#148; &#147;Arcotronics&#148; or any like or similar
name;</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(v) </FONT><FONT face=serif size=2>Seller&#146;s tax returns and financial statements;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(vi)
</FONT><FONT face=serif size=2>any benefit, claim or receivable of Seller for
federal, state or local income taxes, refunds or any other receivables whether
accrued or not;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(vii)
</FONT><FONT face=serif size=2>policies of insurance and any rights or proceeds
arising out of such policies;</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(viii) </FONT><FONT face=serif size=2>existing lawsuits in which Seller is a plaintiff or defendant;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(ix)
</FONT><FONT face=serif size=2>any pension plan assets or other employee benefit
plans of Seller;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(x)
</FONT><FONT face=serif size=2>any investments and prepaid assets (other than
packaging design costs);</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(xi) </FONT><FONT face=serif size=2>the Receivables;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(xii)
</FONT><FONT face=serif size=2>administrative and accounting systems, provided,
however, that the information relating to the Business stored on such systems
shall be included in the Transferred Assets to the extent provided under Section
1.01(a)(vii);</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(xiii) </FONT><FONT face=serif size=2>any security deposits;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(xiv)
</FONT><FONT face=serif size=2>those fixed assets, machinery and equipment
purchased by Seller from Blue Skye (Lux) S.&#224;.r.l., previously used by Seller or
its predecessor in the manufacture of wet tantalum capacitors at its Towcester,
England facility, but redeployed by Seller in the manufacturing of other
products (other than wet tantalum capacitors) at the facilities of Seller&#146;s
wholly-owned Mexican subsidiary, listed on </FONT><U><FONT face=serif size=2>Schedule 1.01(b)(xiv)</FONT></U><FONT face=serif size=2>;
and</FONT></P></DIV>
<P align=center><FONT face=serif size=2>3</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P style="PADDING-LEFT: 30pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(xv) </FONT><FONT face=serif size=2>any and all property,
business and assets of every kind, nature and description, wherever located and
whether real, personal or mixed, tangible or intangible, that (A) is not used in
the Business or (B) that is not otherwise defined as a &#147;Transferred
Asset&#148;.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c) </FONT><FONT face=serif size=2>Simultaneously herewith and
partially in consideration for the Purchase Price, Buyer and Seller are entering
into a separate trademark license agreement governing the use of certain of
Seller&#146;s trademarks in the form attached as </FONT><U><FONT face=serif size=2>Exhibit B</FONT></U><FONT face=serif size=2> hereto (the &#147;</FONT><U><FONT face=serif size=2>Trademark License Agreement</FONT></U><FONT face=serif size=2>&#148;).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 1.02. </FONT><U><FONT face=serif size=2>Assumption of Liabilities
under Transferred Agreements</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> At Closing, Buyer shall assume and be liable for, and
shall pay, perform and discharge directly when due the following Liabilities
(collectively, the &#147;</FONT><U><FONT face=serif size=2>Assumed
Liabilities</FONT></U><FONT face=serif size=2>&#148;):</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a) </FONT><FONT face=serif size=2>all of Seller&#146;s obligations
on the date hereof to fill orders, and all of Seller&#146;s warranty obligations
relating to such orders (to the extent that products subject to such orders have
not been delivered as of the Closing Date), for wet tantalum capacitors set
forth on </FONT><U><FONT face=serif size=2>Schedule 1.01(a)(i)</FONT></U><FONT face=serif size=2>;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b) </FONT><FONT face=serif size=2>all of Seller&#146;s outstanding
commitments for the purchase of raw materials and supplies set forth on
</FONT><U><FONT face=serif size=2>Schedule 1.02(b)</FONT></U><FONT face=serif size=2>;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c) </FONT><FONT face=serif size=2>all of Seller&#146;s obligations
and liabilities under the Transferred Agreements, all as more fully set forth in
the Assignment and Assumption Agreement; and</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d) </FONT><FONT face=serif size=2>all of Seller&#146;s obligations
and liabilities under other Contracts that Buyer agrees to assume pursuant to
Section 1.06.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 1.03. </FONT><U><FONT face=serif size=2>Buyer Not Responsible for
Liabilities Except Section 1.02 </FONT><FONT face=serif size=2>Liabilities</FONT></U><FONT face=serif size=2>.</FONT></STRONG></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a) </FONT><FONT face=serif size=2>Notwithstanding anything
contained in this Agreement to the contrary, Buyer does not assume or agree to
undertake to pay, satisfy, discharge or perform in respect of, and will not be
deemed by virtue of the execution and delivery of this Agreement or any document
delivered at the Closing pursuant to this Agreement, or as a result of the
consummation of the transactions contemplated by this Agreement, to have
assumed, or to have agreed to pay, satisfy, discharge or perform in respect of,
any liability, obligation, indebtedness or Taxes of Seller or of any other
Person or in any way relating to the Business (whether primary or secondary,
direct or indirect, known or unknown, absolute or contingent, matured or
unmatured, or otherwise) other than the Assumed Liabilities, (such liabilities
and obligations retained by Seller, including Seller&#146;s transaction expenses and
all liabilities and obligations with respect to the Excluded Assets and any
amounts due by Seller to licensors of the Business arising prior to the Closing
Date, being referred to herein as the &#147;</FONT><U><FONT face=serif size=2>Retained Liabilities</FONT></U><FONT face=serif size=2>&#148;). It is
specifically agreed that Seller shall retain, and as between Seller and Buyer,
shall remain solely liable for, all of the Retained Liabilities, which Retained
Liabilities shall be satisfied in full or otherwise discharged by Seller in the
ordinary course of business following the Closing. Without limiting the
foregoing, the Retained Liabilities include Liabilities of or owing by
Seller:</FONT></P>
<P align=center><FONT face=serif size=2>4</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<DIV style="PADDING-LEFT: 30pt">
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(i) </FONT><FONT face=serif size=2>related to any Taxes;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(ii)
</FONT><FONT face=serif size=2>to sales representatives, distributors (including
those Liabilities associated with services performed by Seller&#146;s distributors
prior to the Closing but that are otherwise incurred by Buyer after the
Closing), vendors or customers, except as expressly provided under this
Agreement;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iii)
</FONT><FONT face=serif size=2>to any Affiliates, directors, officers,
personnel, former personnel, independent contractors, agents, representatives or
other personnel of Seller or their respective agents or representatives,
including pursuant to any retention agreement with employees of the Business
entered into prior to the Closing;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iv)
</FONT><FONT face=serif size=2>associated with or relating to any compensation
or benefits of any director, officer, personnel, former personnel, independent
contractor, agent, or other representative of Seller, including, without
limitation, in respect of workers&#146; compensation or claims relating to employment
of personnel by Seller prior to the Closing, including severance
obligations;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(v)
</FONT><FONT face=serif size=2>associated with or relating to any Action brought
by any Governmental Authority or any Person whatsoever, arising from any
condition in existence on or before the Closing Date relating to any Transferred
Asset or to any of the premises where the Business has been conducted or any
location where any of the assets used or related to the Business and products
manufactured by the Business have been stored, transported, remodeled or
otherwise delivered for or on behalf of Seller;</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(vi) </FONT><FONT face=serif size=2>associated with or relating to any Excluded Asset;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(vii)
</FONT><FONT face=serif size=2>associated with or relating to Seller&#146;s issuance
or endorsement of any check, note, draft or instrument;</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(viii) </FONT><FONT face=serif size=2>associated with any accounts payable; or</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(ix)
</FONT><FONT face=serif size=2>associated with any warranty or product liability
claims in respect of products manufactured and delivered in connection with the
Business prior to the Closing Date (including any incidental or consequential
damages relating to such claims or products).</FONT></P></DIV>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 1.04. </FONT><U><FONT face=serif size=2>Purchase
Price</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> The
aggregate purchase price for the Transferred Assets shall be Thirty Five Million
Two Hundred Thousand Dollars ($35,200,000) (the &#147;</FONT><U><FONT face=serif size=2>Purchase </FONT></U><U><FONT face=serif size=2>Price</FONT></U><FONT face=serif size=2>&#148;). Buyer shall pay the Purchase Price as follows:</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>At the time of the Closing by delivering to Seller, by wire transfer in
immediately available funds, the amount equal to Thirty Three Million Seven
Hundred Thousand Dollars ($33,700,000) (&#147;</FONT><U><FONT face=serif size=2>Closing Date Cash Payment</FONT></U><FONT face=serif size=2>&#148;).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>At the time of the Closing by delivering to the Escrow Agent, by wire
transfer in immediately available federal funds, the amount equal to One Million
Five Hundred</FONT></P>
<P align=center><FONT face=serif size=2>5</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Thousand Dollars ($1,500,000),
consistent with the Escrow Agreement (the &#147;</FONT><U><FONT face=serif size=2>Escrow Amount</FONT></U><FONT face=serif size=2>&#148;). The Escrow Amount
shall be held in an escrow account to secure Seller&#146;s obligations under this
Agreement and shall be transferred to Seller (subject to pending claims) or
Buyer (or Buyer Guarantor on behalf of Buyer) as provided in the Escrow
Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 1.05. </FONT><U><FONT face=serif size=2>Allocation of Buyer&#146;s
Consideration</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> As
soon as practicable, Buyer shall provide to Seller a preliminary allocation of
the Purchase Price delivered hereunder to the Transferred Assets, the parties&#146;
agreements as contemplated by this Agreement and the Trademark License
Agreement, it being understood that only a nominal valuation is to be assigned
to the Trademark License Agreement. Once the parties have agreed on such
allocation, each party agrees to report the transaction contemplated by this
Agreement for tax purposes in accordance with such allocation.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
1.06.</STRONG></FONT><STRONG><FONT face=sans-serif> </FONT><U><FONT face=serif size=2>Assignment of Contracts and Rights</FONT></U><FONT face=serif size=2>.</FONT></STRONG></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a) </FONT><U><FONT face=serif size=2>Schedule
1.06(a)(i)</FONT></U><FONT face=serif size=2> lists all written Contracts
(including Contracts that consist only of open purchase orders) in effect
between Seller and other Persons for the purchase of wet tantalum capacitors by
such Persons from Seller (the &#147;</FONT><U><FONT face=serif size=2>Customer
Contracts</FONT></U><FONT face=serif size=2>&#148;) and identifies those Customer
Contracts that are between Seller and a distributor (&#147;</FONT><U><FONT face=serif size=2>Distributor Contracts</FONT></U><FONT face=serif size=2>&#148;) and those that
are between Seller and Persons that are not distributors (&#147;</FONT><U><FONT face=serif size=2>Other Customer Contracts</FONT></U><FONT face=serif size=2>&#148;).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b) </FONT><FONT face=serif size=2>Distributor Contracts shall
not be assigned to Buyer. Buyer shall fulfill Seller&#146;s obligations with respect
to any open orders under Distributor Contracts for wet tantalum capacitors
listed on </FONT><U><FONT face=serif size=2>Schedule 1.01(a)(i)</FONT></U><FONT face=serif size=2> and shall be entitled to receive the amount of any payments
due to Seller with respect to such orders. After fulfillment of such open
orders, any further orders and sales of wet tantalum capacitors given to Buyer
by the respective distributors party to the Distributor Contracts shall be
governed by the terms of Buyer&#146;s agreements with the distributors party to the
Distributor Contracts. Seller shall direct any payor of amounts to which Buyer
is entitled to receive pursuant to this Section 1.06(b), to pay such amounts,
net of any discounts and credits which are applicable to such amounts payable
under the relevant Distributor Contract, directly to Buyer except with respect
to any orders for which Seller provided the invoice, provided, however, that in
all cases where Seller receives any amounts due to Buyer pursuant to this
Section 1.06(b), Seller shall promptly forward such amounts to Buyer.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>Transferred Agreements shall consist of (i) Other Customer Contracts that
relate solely to the sale of wet tantalum capacitors and that are assignable by
their terms without Consent or for which all required consents are obtained
prior to the Closing Date and (ii) the portion of Other Customer Contracts
relating to the sale of wet tantalum capacitors to the extent that such portion
can be and is severed from the remainder of the Contract pursuant to
documentation satisfactory to Seller and Buyer and executed by the other party
to the Contract prior to the Closing Date. Seller shall provide Buyer with
copies of all Transferred Agreements on or prior to the Closing. Anything
contained in this Agreement to the contrary notwithstanding, this Agreement
shall not constitute an agreement or attempted agreement to transfer, sublease
or assign any Contract or any claim or right with respect to any benefit arising
thereunder or resulting therefrom, if an attempted transfer, sublease or
assignment thereof, without the required Consent of any other party thereto,
would constitute a breach thereof or in any way affect the rights of Buyer or
Seller thereunder. Within a commercially reasonable time after
Closing,</FONT></P>
<P align=center><FONT face=serif size=2>6</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>Seller shall use its commercially
reasonable efforts to obtain the Consent of any such third party to the
transfer, sublease or assignment to Buyer of Other Customer Contracts that
relate solely to the sale of wet tantalum capacitors in cases in which such
Consent is required for such transfer, sublease or assignment. If any such
Consent is not obtained, Seller shall use its commercially reasonable efforts to
cooperate with Buyer in reasonable and lawful arrangements designed to provide
Buyer the benefits thereunder and provide for Buyer to perform the obligations
thereunder, including (a) adherence to reasonable procedures established by
Buyer for the immediate transfer to Buyer of any payments or other funds
received by Seller thereunder (other than the Receivables) and (b) enforcement
for the benefit of Buyer, at Buyer&#146;s expense, of any and all rights of Seller
thereunder against the other party or parties thereto arising out of the breach
or cancellation thereof by such other party or parties or otherwise and
performance by Buyer, at Buyer&#146;s expense, on behalf of
Seller</FONT><STRIKE><FONT face=serif size=2>,</FONT></STRIKE><FONT face=serif size=2> of the obligations thereunder. For the avoidance of doubt, Buyer agrees
to assume all obligations and liabilities of Seller with respect to the Business
and the sale of wet tantalum capacitors arising under Other Customer Contracts
that are not assigned to Buyer but only if and to the extent that Buyer is
entitled to receive the corresponding amounts due to Buyer with respect to wet
tantalum capacitors sold pursuant to such Other Customer Contracts. Consistent
with the foregoing, Buyer agrees to assume Seller&#146;s warranty obligations
concerning all Products shipped on or after the Closing Date for which Seller
issues invoices to the customer pursuant to Other Customer Contracts that are
not assigned to Buyer.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>To the extent assignable, Seller hereby assigns to Buyer so much of the
rights of Seller under or pursuant to all warranties, representations and
guarantees made by suppliers, manufacturers and contractors relating directly to
products sold or services provided in connection with the Business or affecting
the property, machinery or equipment used by Seller in the Business, to the
extent that such rights related to Transferred Assets.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 1.07. </FONT></B><B><U><FONT face=serif size=2>No Other
Representations</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><FONT face=serif size=2>Except for the express representations and warranties of
Seller contained in Article III, Buyer acknowledges that Seller has not made,
and Buyer has not relied upon, any other representation or warranty, express or
implied, with respect to the Business or the Transferred Assets. SELLER HEREBY
EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, AND WARRANTIES
</FONT><FONT face=serif size=2>ARISING FROM CUSTOM AND PRACTICE. EXCEPT AS
EXPRESSLY PROVIDED IN ARTICLE III, SELLER SELLS, AND BUYER ACCEPTS, THE
TRANSFERRED ASSETS ON AN &#147;AS IS, WHERE IS&#148; BASIS; provided, however, that
nothing herein shall relieve Seller of its liability for fraud or intentional
misstatement or misrepresentation.</FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE II</FONT></B></P>
<P align=center><B><FONT face=serif size=2>CLOSING</FONT></B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 2.01. </FONT></B><FONT face=serif size=2>Upon the terms and
subject to the conditions of this Agreement, the closing of the transaction
contemplated by this Agreement (the &#147;</FONT><U><FONT face=serif size=2>Closing</FONT></U><FONT face=serif size=2>&#148;) is taking place at the
offices of Kramer Levin Naftalis &amp; Frankel LLP, 1177 Avenue of the Americas,
New York, New York 10036, on September 15, 2008 (the &#147;</FONT><U><FONT face=serif size=2>Closing Date</FONT></U><FONT face=serif size=2>&#148;); provided that the
effective time of the Closing shall be 8:00 a.m. on the Closing Date.</FONT></P>
<P align=center><FONT face=serif size=2>7</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 2.02.</FONT><FONT face=sans-serif> </FONT><U><FONT face=serif size=2>Seller&#146;s Deliveries at Closing</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> At the Closing, Seller shall deliver or cause to be
delivered to Buyer, the following:</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>each of the Ancillary Agreements, in each case executed by a duly
authorized officer of Seller;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>such other duly executed documents and certificates as may be required to
be delivered by Seller pursuant to the terms of this Agreement; and</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 2.03. </FONT><U><FONT face=serif size=2>Buyer&#146;s Deliveries at
Closing</FONT></U></STRONG><FONT face=serif size=2><STRONG>. </STRONG>At the
Closing, Buyer shall deliver, or cause to be delivered, the
following:</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>the Closing Date Cash Payment to Seller by wire transfer of immediately
available funds in accordance with Section 1.04 hereto;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>each of the Ancillary Agreements, in each case executed by a duly
authorized officer of Buyer that is a party thereto (or by a duly authorized
officer of any direct or indirect subsidiary of Buyer Guarantor to which a
Transferred Agreement is assigned) and delivered to Seller;</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(c)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>the Escrow Amount to the Escrow
Agent; and</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>such other duly executed documents and certificates to Seller as may be
required to be delivered by Buyer pursuant to the terms of this
Agreement.</FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE III</FONT></B></P>
<P align=center><B><FONT face=serif size=2>REPRESENTATIONS AND WARRANTIES OF
SELLER</FONT></B></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Seller
represents and warrants to Buyer as follows:</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 3.01.</FONT><FONT face=sans-serif> </FONT><U><FONT face=serif size=2>Organization and Authority of Seller</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Seller
has the requisite corporate power and authority to own, operate, lease, possess
or dispose of the properties, including the Transferred Assets, that it purports
to own, operate, possess or lease and to carry on its business (including the
Business) as it is presently conducted. Seller has the full legal right and all
corporate power and authority to enter into this Agreement, and each of the
Ancillary Agreements, and to consummate the transactions contemplated hereby and
thereby. This Agreement, and each of the Ancillary Agreements has been duly
authorized, executed and delivered by Seller and no other corporate action on
part of Seller is necessary to authorize this Agreement and the Ancillary
Agreements or to consummate the transactions so contemplated. This Agreement and
each of the Ancillary Agreements (assuming due authorization, execution and
delivery by Buyer) constitutes a legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its terms.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 3.02.</FONT><FONT face=sans-serif> </FONT><U><FONT face=serif size=2>No Conflict</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG>
Except as set forth on </FONT><U><FONT face=serif size=2>Schedule
3.02</FONT></U><FONT face=serif size=2>, neither the execution nor delivery of
this Agreement, or the Ancillary Agreements by Seller nor the</FONT></P>
<P align=center><FONT face=serif size=2>8</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>consummation by Seller of any of the
transactions contemplated hereby or thereby, will (a) conflict with or violate
the Certificate of Incorporation or By-laws of Seller (b) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, modification,
cancellation or acceleration or loss of benefits) under, any of the terms,
conditions or provisions of any Contract to which Seller is a party or to which
it or the Transferred Assets may be subject or which is included in the
Transferred Assets or the Assumed Liabilities or (c) violate any Permit
applicable to Seller, the Transferred Assets, the Assumed Liabilities or the
Business; except in the cases of clauses (b) or (c) for those violations,
breaches or defaults that would reasonably be expected to not have a Material
Adverse Effect.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.03.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Consents and
Approvals</FONT></U></B><FONT face=serif size=2>. Except as set forth on
</FONT><U><FONT face=serif size=2>Schedule 3.03</FONT></U><FONT face=serif size=2>, the execution and delivery of this Agreement and the Ancillary
Agreements by Seller do not, and the performance of this Agreement and each of
the Ancillary Agreements by Seller will not, require any Consent of any
Governmental Authority except as such may have been obtained, taken or made on
or prior to the date hereof (other than pre-consummation trade or competition
filings relating to the transaction contemplated by this Agreement as to which
no representation is made although no concession is made that any such filings
are required). Other than ministerial filings with Mexican Governmental
Authorities, no Consents are required in order for Buyer to move the Transferred
Assets outside of Mexico. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
3.04.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Financial Statements</FONT></U></STRONG><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Schedule 3.04(a)</FONT></U><FONT face=serif size=2> sets forth
a complete and accurate copy of the unaudited consolidated statements of income
for the Business as of and for each of the years ended March 31, 2008, March 31,
2007 and March 31, 2006 (provided that the consolidated statement of income for
the year ended March 31, 2006 shall not include any revenue or related financial
information relating to operation of the Arco Tangible Assets), respectively
(collectively, the &#147;</FONT><U><FONT face=serif size=2>Financial
Statements</FONT></U><FONT face=serif size=2>&#148;), and a complete and accurate
copy of the unaudited consolidated statements of income as of and for the
quarter ended June 30, 2008 (the &#147;</FONT><U><FONT face=serif size=2>Interim
Financial Statements</FONT></U><FONT face=serif size=2>&#148;). </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Since June 30, 2008, the Business has been conducted only in
the ordinary course consistent with past practice and there has been no material
adverse change in the business operations, conditions or prospects, financial or
otherwise, with respect to the Business or the Transferred Assets and, to
Seller&#146;s Knowledge, no such change has been threatened nor is it pending.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>The Financial Statements and the Interim Financial Statements
(as of the date thereof and for the periods covered thereby) (i) have been
prepared in accordance with the books and records of Seller and the Business,
(ii) are true, complete and correct in all material respects and present fairly
in all material respects the results of operations of the Business for the
periods indicated and (iii) have been prepared in accordance with Business
Accounting Principles. </FONT></P>
<P align=center><FONT face=serif size=2>9 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
3.05.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Title to Transferred Assets; Condition and Sufficiency of
Assets</FONT></U></STRONG><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>The Arco Intellectual Property constitutes all of the
Intellectual Property acquired from Blue Skye (Lux) S.&#224;.r.l related exclusively
to wet tantalum capacitor products. The Transferred Core Intellectual Property
constitutes all of the currently existing Intellectual Property exclusively used
or to be used by Seller to manufacture the products listed on </FONT><U><FONT face=serif size=2>Schedule 3.05(a)(i)</FONT></U><FONT face=serif size=2>. Other
than the Transferred Intellectual Property, the rights licensed to Buyer under
the Trademark License Agreement and the proprietary information, know-how and
technical information transferred pursuant to this Agreement, Seller does not
own or use any other Intellectual Property, proprietary information, know-how or
technical information necessary for Buyer to manufacture as Seller manufactured
prior to the date hereof, or necessary for the right to use, sell, offer to
sell, market or import, any of the products of the Business listed on
</FONT><U><FONT face=serif size=2>Schedules 3.05(a)(i)</FONT></U><FONT face=serif size=2> and </FONT><U><FONT face=serif size=2>3.05(a)(ii)</FONT></U><FONT face=serif size=2>. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>The Equipment is in good operating condition and repair,
subject to normal wear and tear, and is adequate for the uses they are put to
and is not in need of maintenance and repair that is material in nature or cost.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Seller or its Mexican subsidiary have taken, or in a timely
manner will take after the Closing, all actions necessary to ensure that the
Transferred Assets imported into Mexico have been duly and legally imported in
Mexico for the development of the Business under certain permits issued to the
Mexican subsidiaries of Seller by the Ministry of Economy under the denominated
Decreto Para el Fomento de la Industria Manufacturera Maquiladora y de Servicios
de Exportaci&#243;n (&#147;</FONT><U><FONT face=serif size=2>IMMEX</FONT></U><FONT face=serif size=2>&#148;). </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Seller has, or, with respect to the Arco Intellectual Property
owned by Arcotronics, Arcotronics has, the complete and unrestricted power and
the unqualified right to sell, transfer, assign and deliver, and following the
Closing, Buyer will have, good and valid title to all Transferred Assets, and
Seller shall so defend Buyer&#146;s title, free and clear of all title defects or
objections, mortgages, liens, claims, charges, pledges, security interests
(collectively &#147;</FONT><U><FONT face=serif size=2>Liens</FONT></U><FONT face=serif size=2>&#148;) except for the liens described on </FONT><U><FONT face=serif size=2>Schedule 3.05</FONT></U><FONT face=serif size=2>
(&#147;</FONT><U><FONT face=serif size=2>Permitted Liens</FONT></U><FONT face=serif size=2>&#148;). </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
3.06.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Agreements</FONT></U></STRONG><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>The Customer Contracts are set forth on </FONT><U><FONT face=serif size=2>Schedule 1.06(a)(i)</FONT></U><FONT face=serif size=2>. Seller
has previously delivered or made available to Buyer correct and complete copies
of each of the Other Customer Contracts of Seller other than Other Customer
Contracts that consist only of open purchase orders. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Each of the Other Customer Contracts is a legal, valid and
binding agreement enforceable by and against Seller in accordance with its terms
and in full force and effect on the date hereof. Seller has received no notice
of cancellation or termination (written or otherwise) under any option or right
reserved to the other party to any Other Customer Contract or any notice of
default (written or otherwise) under such agreement. Except as otherwise
disclosed on </FONT><U><FONT face=serif size=2>Schedule 3.06(b)</FONT></U><FONT face=serif size=2>, neither Seller, nor to the Knowledge of Seller any other
party is in breach or default of any Other Customer Contract that would cause a
Material Adverse Effect and, to the Knowledge of Seller, no event has occurred
that, with notice or lapse of time or both, would constitute such a breach or
default or permit termination, modification or acceleration under such Other
Customer Contract that would </FONT></P>
<P align=center><FONT face=serif size=2>10 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>cause a Material Adverse Effect. Except
as separately identified in </FONT><U><FONT face=serif size=2>Schedule
3.06(b)</FONT></U><FONT face=serif size=2>, no Consent of any person is needed
in order that the Other Customer Contracts continue in full force and effect
following the assignment of such agreements to Buyer. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Aside from the Customer Contracts, the orders listed on
</FONT><U><FONT face=serif size=2>Schedule</FONT><FONT face=serif size=2>
</FONT><FONT face=serif size=2>1.01(a)(i)</FONT></U><FONT face=serif size=2> and
</FONT><U><FONT face=serif size=2>Schedule 1.02(b)</FONT></U><FONT face=serif size=2>, Contracts for tantalum wire and powder and the other Contracts listed
on </FONT><U><FONT face=serif size=2>Schedule 3.06(c)</FONT></U><FONT face=serif size=2>, there are no (i) Customer Contracts; (ii) written Contracts for raw
materials specifically used by Seller to manufacture wet tantalum capacitors;
(iii) written Contracts specifically relating to the Business pursuant to which
Seller is required to pay or is entitled to receive $50,000 or more in any
twelve month period or (iv) other written Contracts specifically relating to the
Business that are material to the Business as conducted by Seller. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Seller is not a party to a Contract that will in any way
restrict or limit the conduct of the Business by Buyer or the use of the
Transferred Assets by Buyer, including without limitation any joint venture or
other cooperative.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
3.07.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Intellectual Property Rights</FONT></U></STRONG><FONT face=serif size=2>. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Schedule</FONT></U><B><U><FONT face=serif size=2>
</FONT></U></B><U><FONT face=serif size=2>3.07</FONT></U><FONT face=serif size=2> sets forth a complete and accurate list of all United States and foreign
issued or registered Intellectual Property (including but not limited to
patents, copyrights and trademarks), and all applications therefor, used in
connection with the Business, indicating for each the applicable jurisdiction,
issuance/registration/application number, and dates of
filing/issuance/registration. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Except as set forth on </FONT><U><FONT face=serif size=2>Schedule 3.07</FONT></U><FONT face=serif size=2>, Seller is the sole and
exclusive owner of the Transferred Intellectual Property used in connection with
the Business, free and clear of all liens, claims, charges and encumbrances and
free from contractual restrictions and any other restriction. In each case where
any patent, registered trademark, registered copyright, or the like used in
connection with the Business is held by Seller by assignment, the assignment has
been duly and properly recorded with the U.S. Copyright Office, the U.S. Patent
and Trademark Office or the corresponding foreign authorities, as the case may
be, to preserve all of Seller&#146;s rights.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Seller has the full right and authority to conduct the
Business and use the Transferred Intellectual Property used in connection with
the Business in the manner in which they are currently being conducted and used
and, to the Knowledge of Seller, such activities do not conflict with, violate,
misappropriate or infringe on the rights of any other Person.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>No Action has been asserted, nor to the Knowledge of Seller
has any Action been threatened, verbally or otherwise, by any Person (i)
challenging, or seeking to deny or restrict, the use by Seller of any
Transferred Intellectual Property or (ii) alleging the violation,
misappropriation, or infringement by Seller in connection with its conduct of
the Business or its use of Transferred Intellectual Property. Seller has not
asserted or threatened any Action against (i) any Person based upon any
Intellectual Property related to the Business or (ii) any Intellectual Property
owned by any other Person.</FONT></P>
<P align=center><FONT face=serif size=2>11 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(e)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>No Person, other than Seller and Arcotronics, is authorized to
use any of the trademarks &#147;KEMET&#148;, &#147;CASTANET&#148; and &#147;ARCOTRONICS&#148; or, to Seller&#146;s
Knowledge, any other Intellectual Property owned by Seller, with respect to the
manufacture, marketing, distribution, use, importation or sale of wet tantalum
capacitors or otherwise in competition with any aspect of the Business except as
set forth on </FONT><U><FONT face=serif size=2>Schedule 3.07(e)</FONT></U><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(f)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>No Contract, agreement or understanding between Seller and any
Person exists which could impede or prevent the continued use by Seller or,
following the Closing, Buyer in and to the Transferred Intellectual Property or
which could result in the grant of any rights therein to another Person. No
registered or issued Transferred </FONT><FONT face=serif size=2>Intellectual
Property set forth in </FONT><U><FONT face=serif size=2>Schedule
3.07</FONT></U><FONT face=serif size=2> has, to Seller's Knowledge, lapsed,
expired, or been abandoned or canceled, or is subject to any pending or
threatened opposition, cancellation proceeding before the U.S. Patent and
Trademark Office or the U.S. Copyright Office or other U.S. or foreign
proceeding.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(g)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>To the Knowledge of Seller, all employees and independent
contractors of Seller who created, prepared, developed or conceived any
inventions, discoveries, trade secrets, ideas or works of authorship, whether or
not patented or patentable or otherwise protectable under law, have duly
assigned all of their rights therein to Seller pursuant to valid and enforceable
written agreements.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(h)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Schedule 3.07(h)</FONT></U><FONT face=serif size=2> lists all
computer software, code, programs, databases, and computer services, other than
commercially available off-the-shelf items costing less than $500 per licensed
user/copy, which are necessary to operate the Equipment. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.08.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Litigation</FONT></U></B><FONT face=serif size=2>. Except as set forth in </FONT><U><FONT face=serif size=2>Schedule 3.08</FONT></U><FONT face=serif size=2>, (i) no Action is
pending or, to the Knowledge of Seller, threatened that questions the validity
of this Agreement or any Ancillary Agreement or any action taken or to be taken
in connection with this Agreement or any Ancillary Agreement, or which seeks to
delay or prevent the consummation of the transactions being consummated hereby
or thereby; (ii) no Action is pending or, to the Knowledge of Seller,
threatened, that relate to or otherwise affect any of the Transferred Assets,
the Assumed Liabilities or the Business; and (iii) there are no outstanding
judgments, writs, injunctions, orders, decrees or settlements that apply, in
whole or in part, to any of the Transferred Assets, the Assumed Liabilities, or
the Business, that restrict the ownership or use of any Transferred Assets, the
Assumed Liabilities or the Business in any way.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
3.09.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Permits; Compliance with Laws</FONT></U></STRONG><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>All Permits required with respect to the Business have been
legally obtained and maintained and are valid and in full force and effect.
Seller is duly licensed to conduct the Business as presently conducted in all
jurisdictions in which the Business is conducted and is in compliance with all
of the terms and conditions of such licenses. There has been no material change
in the facts or circumstances reported or assumed in the application for or
granting of any Permits. No outstanding violations are or have been recorded in
respect of </FONT></P>
<P align=center><FONT face=serif size=2>12 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>any of the Permits. No proceeding is
pending or, to Seller&#146;s Knowledge, threatened, to suspend, revoke, withdraw,
modify or limit any Permit, and, to Seller&#146;s Knowledge, there is no fact, error
or admission relevant to any Permit that would permit the suspension,
revocation, withdrawal, modification or limitation of, or result in the
threatened suspension, revocation, withdrawal, modification or limitation of, or
in the loss of any Permit. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>The Business is being and has been conducted in compliance in
all material respects with all Permits and applicable Laws. Seller is not in
violation of any Laws applicable to the Business by which any of the Transferred
Assets is bound or affected, other than those violations which do not have a
Material Adverse Effect. Except as disclosed on </FONT><U><FONT face=serif size=2>Schedule 3.09(b)</FONT></U><FONT face=serif size=2>, Seller has not taken
any action, or failed to take any action, which might, to any extent, prevent,
impede or result in the revocation of the vesting in Buyer of good and valid
title to the Transferred Assets (or any portion thereof) free and clear of all
claims and interests of creditors and equity security holders. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>There are no Permits required to conduct the Business as and
where it is presently being conducted and which relate specifically to the
manufacturing process for wet tantalum capacitors.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Except as set forth on </FONT><U><FONT face=serif size=2>Schedule 3.09</FONT></U><FONT face=serif size=2> hereto, Seller has not
received any notification that it is in violation of any applicable building,
zoning, anti-pollution, environmental, health or other Law in respect of the
Business and no such violation exists. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
3.10.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Government Contracts</FONT></U></STRONG><FONT face=serif size=2>. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>&#147;Government Contracts&#148; shall mean all current Contracts
pursuant to which the Business has generated and/or is expected to generate
revenues in excess of $50,000: (i) between Seller and the United States
Government, including any blanket purchase agreements, task orders, or other
agreements thereunder; and (ii) between Seller and any entity which is a party
to a Contract or other agreement with the United States Government in which
Seller participates in the bid or contract process. Seller is not a party to any
current dispute relating to a Government Contract. Seller has not, with respect
to any Governmental Contract, received notice that Seller has breached or
violated any Law, order, certification, representation, clause, provision, or
requirement with respect to any such Government Contract. There are no current
or, to the Knowledge of Seller, threatened claims, appeals, &#147;Requests for
Equitable Adjustment,&#148; protests, or lawsuits (including, without limitation, any
qui tam suit brought under the False Claims Act, 31 U.S.C. 3729), against Seller
arising out of or relating to any Government Contract. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>During the past five (5) years, Seller has not been suspended
or debarred from doing business with the United States Government, nor has any
such suspension or debarment action been threatened, proposed, or commenced. To
the Knowledge of Seller, there is no valid basis, or specific circumstances that
with the passage of time would become a basis, for Seller&#146;s suspension or
debarment from doing business with the United States Government. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Neither Seller, nor, to the Knowledge of Seller, any of
Seller&#146;s officers, directors, or employees, has knowingly provided to any person
any false or misleading </FONT></P>
<P align=center><FONT face=serif size=2>13 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>information with respect to Seller, or
any of its officers, directors, equityholders or employees, in connection with
the procurement of, performance under or renewal of, any Government Contract.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.11.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Insurance</FONT></U></B><FONT face=serif size=2>. Seller or its Affiliates have in place insurance policies
with respect to the Transferred Assets and the Business in amounts and types
that are customary in the industry for similar assets and sufficient to cover
the full value of the Tangible Personal Property, and all such policies are
valid and in full force and effect. </FONT><U><FONT face=serif size=2>Schedule
3.11</FONT></U><FONT face=serif size=2> contains a complete and accurate list
and an accurate summary of all property, commercial general liability, workers&#146;
compensation and automobile liability insurance policies currently maintained
relating to the Transferred Assets or the Business. Such policies, as are
current, are valid and in full force and effect, all premiums due thereon have
been paid, Seller and, if applicable, its Affiliates, have complied with the
material provisions of such policies, and all such policies either specifically
include Seller as named insured or include omnibus named insured language which
generally includes Seller, and Seller or its Affiliates have not received any
notification of cancellation, modification or denial of renewal of any such
policies, except as set forth on </FONT><U><FONT face=serif size=2>Schedule
3.11</FONT></U><FONT face=serif size=2>. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.12.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Employees and Related
Matters</FONT></U></B><FONT face=serif size=2>. There are no pending or
threatened disputes, grievances, charges, complaints, petitions or proceedings
involving the employees of Seller that could be reasonably expected to have a
Material Adverse Effect and there are no pending or threatened strikes, lockouts
or general work stoppages involving employees of Seller which could cause a
cessation of operation of the Business or any facility where the Business is
conducted and Seller is not subject to show cause, notices or debarment or
administrative procedure involving any Governmental Authority related to its
employees practices with respect to the Business that could reasonably be
expected to result in a Material Adverse Effect. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.13.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Customers and
Suppliers</FONT></U></B><FONT face=serif size=2>. </FONT><U><FONT face=serif size=2>Schedule 3.13</FONT></U><FONT face=serif size=2> sets forth a list of (x)
the ten (10) largest customers of the Business in terms of sales during the
fiscal year ended March 31, 2008 and for Arcotronics, year-to-date as of July
31, 2008 and for Seller and its subsidiaries, year-to-date as of August 20,
2008, showing the approximate total sales by the Business to each such customer
during such periods, respectively, and (y) the ten (10) largest suppliers to the
Business during the fiscal year ended March 31, 2008 and for the quarter ended
June 30, 2008, measured by dollar volume of purchases. Except as set forth in
</FONT><U><FONT face=serif size=2>Schedule 3.13</FONT></U><FONT face=serif size=2>, Seller has received no notice of termination and is not aware of an
intention to terminate the relationship with the Business or significantly
reduce the volume of the Business from any customer or supplier named in
</FONT><U><FONT face=serif size=2>Schedule 3.13</FONT></U><FONT face=serif size=2>. The list of customers provided by Seller in accordance with Section
5.02 is true and correct. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.14.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Product Liability</FONT></U></B><FONT face=serif size=2>. Except as set forth in </FONT><U><FONT face=serif size=2>Schedule 3.14</FONT></U><FONT face=serif size=2> hereto, no Action has
been commenced in the five year period immediately preceding the date of this
Agreement, is currently pending or, to Seller&#146;s Knowledge, threatened, against
or involving the Business relating to any product alleged to have been
manufactured or sold by Seller in connection with the Business and alleged to
have been defective, or improperly designed or manufactured. </FONT></P>
<P align=center><FONT face=serif size=2>14 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
3.15.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Environmental Compliance</FONT></U><FONT face=serif size=2>.</FONT></STRONG><FONT face=serif size=2> </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Each of Seller and its Affiliates is in compliance in all
material respects with the Mexican General Law of Ecological Equilibrium and
Environmental Protection, its Regulations and Mexican Official Standards that
may apply (the &#147;<U>Mexican Environmental </U></FONT><FONT face=serif size=2><U>Legislation</U></FONT><FONT face=serif size=2>&#148;), as well as all
applicable federal, foreign, state and local environmental laws, rules and
regulations, including, without limitation, those applicable to emissions to the
environment, waste management and waste disposal, except for such noncompliance
which would not, individually or in the aggregate, reasonably be likely to have
a Material Adverse Effect. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>No lien has been imposed or asserted on any of the Transferred
Assets, the Business or the Assumed Liabilities by any Governmental Authority or
other person in connection with any Mexican Environmental Law or Environmental
Condition. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Seller has discharged all of its obligations pertaining to the
operation of the Business. Seller (i) has all environmental permits necessary
for the activities and operations of the Business and for any past or ongoing
alterations or improvements at its facilities in Ciudad Victoria and Matamoros,
State of Tamaulipas, Mexico, and (ii) is not in violation of any such
environmental permits and has applied for renewals where necessary. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.16.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Foreign Practices
Act</FONT></U></B><FONT face=serif size=2>. Seller has not, directly or
indirectly, at any time directly in connection with the Business made any
payment to any state, federal or foreign governmental officer or official, or
other person charged with similar public or quasi-public duties, other than
payments or contributions required or allowed by applicable law. Seller&#146;s
internal accounting controls and procedures with respect to the Business are
sufficient to cause Seller to comply in all material respects with the Foreign
Corrupt Practices Act of 1977, as amended. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.17.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Inventory</FONT></U></B><FONT face=serif size=2>. At the Closing, the Inventory will be items of good quality
and usable or saleable by the Business in the ordinary course of business
consistent with past practice and merchantable and fit for the purpose for which
such Inventory was procured or manufactured. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.18.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Transactions with
Affiliates</FONT></U></B><FONT face=serif size=2>. Except as set forth on
</FONT><U><FONT face=serif size=2>Schedule 3.18</FONT></U><FONT face=serif size=2>, no officer, director, employee, agent or representative of Seller, nor
any spouse or child of any of them or any Person affiliated with any of them
(each a &#147;</FONT><U><FONT face=serif size=2>Related Person</FONT></U><FONT face=serif size=2>&#148;), has any interest in any assets or properties used in or
pertaining to the Business, to the extent related to the Transferred Assets or
Assumed Liabilities. No Related Person has, or owns any Person who has, directly
or indirectly, and whether on an individual, joint or other basis, any equity
interest or any other financial or profit interest in a Person that has (i) had
business dealings with Seller pertaining to the Business or (ii) engaged in
competition with the Business, to the extent related to the Transferred Assets
or the Assumed Liabilities. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
3.19.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Taxes</FONT></U></STRONG><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Except as set forth on </FONT><U><FONT face=serif size=2>Schedule 3.19</FONT></U><FONT face=serif size=2>, all tax returns or
information statements required to be filed by or on account of the Transferred
Assets, the Assumed Liabilities or the Business have been filed before the
federal, state or local tax authorities, and all statements and information
contained therein are true and correct in all material </FONT></P>
<P align=center><FONT face=serif size=2>15 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>respects and Seller has paid or caused
to be paid all Taxes which have become due pursuant to such returns or pursuant
to any assessments which have been levied on Seller. Except as set forth on
</FONT><U><FONT face=serif size=2>Schedule 3.19</FONT></U><FONT face=serif size=2>, to Seller&#146;s Knowledge, there is no tax deficiency proposed or
threatened by any governmental or regulatory agency against the Business, or the
Transferred Assets. Except as set forth on </FONT><U><FONT face=serif size=2>Schedule 3.19</FONT></U><FONT face=serif size=2>, no audit of any tax
return of Seller with respect to the Business, or the Transferred Assets is in
progress. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>All Taxes with respect to the Business, the Assumed
Liabilities and the Transferred Assets not yet due but incurred on or before the
execution of this Agreement (including, without limitation, Taxes arising out of
the transactions contemplated hereby) are or will be adequately disclosed to
Buyer in order to ascertain that there is no contingent liability that may be
charged to Seller affecting the Business, the Assumed Liabilities or the
Transferred Assets.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.20.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Brokers and Finders</FONT></U></B><FONT face=serif size=2>. Except as set forth on </FONT><U><FONT face=serif size=2>Schedule 3.20</FONT></U><FONT face=serif size=2>, neither Seller nor any
of its officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders&#146; fees in
connection with the transactions contemplated by this Agreement. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 3.21.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>No Misleading
Statements</FONT></U></B><FONT face=serif size=2>. To the Knowledge of Seller,
it has not failed to disclose to Buyer in writing any fact that has specific
application to the Business (other than general economic or industry conditions)
that could reasonably be expected to have a Material Adverse Effect on the
Business. No representation or warranty contained in this Agreement contains any
untrue statement of a material fact, or omits or will omit to state any material
fact necessary to make any of them, in light of the circumstances under which it
was made, not misleading. </FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE IV </FONT></B></P>
<P align=center><B><FONT face=serif size=2>REPRESENTATIONS AND WARRANTIES OF
BUYER </FONT></B></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Buyer
represents and warrants to Seller as follows: </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 4.01.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Organization and Authority of
Buyer</FONT></U></B><FONT face=serif size=2>. Buyer is a company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization. Buyer has the full legal right and all corporate power and
authority to enter into this Agreement, and each of the Ancillary Agreements to
which it is a party, and to consummate the transactions contemplated hereby and
thereby. This Agreement, and each of the Ancillary Agreements has been duly
authorized, executed and delivered by Buyer and no other corporate action on
part of Buyer is necessary to authorize this Agreement and the Ancillary
Agreements or to consummate the transactions so contemplated. This Agreement and
each of the Ancillary Agreements (assuming due authorization, execution and
delivery by Seller) constitutes a legal, valid and binding obligation of Buyer
enforceable against Buyer in accordance with its terms.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 4.02.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>No Conflict</FONT></U></B><FONT face=serif size=2>. Neither the execution nor delivery of this Agreement, or the
Ancillary Agreements by Buyer nor the consummation by Buyer of any of the
</FONT></P>
<P align=center><FONT face=serif size=2>16 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>transactions contemplated hereby or
thereby, will (a) conflict with or violate the certificate of incorporation,
by-laws, or similar organizational documents of Buyer (b) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, modification,
cancellation or acceleration or loss of benefits) under, any of the terms,
conditions or provisions of any Contract to which Buyer is a party or (c)
violate any Permit applicable to Buyer; except in the cases of clauses (b) or
(c) for those violations, breaches or defaults that would reasonably be expected
to not have a material adverse affect on the ability of Buyer to consummate the
transactions contemplated by this Agreement and each of the Ancillary
Agreements. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 4.03.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Consents and
Approvals</FONT></U></B><FONT face=serif size=2>. The execution and delivery of
this Agreement and each of the Ancillary Agreements by Buyer does not, and the
performance of this Agreement and each of the Ancillary Agreements by Buyer will
not, require any Permit or Consent of any Governmental Authority or any other
Person except as such may have been obtained, taken or made on or prior to the
date hereof (other than pre-consummation trade or competition filings relating
to the transaction contemplated by this Agreement as to which no representation
is made although no concession is made that any such filings are
required).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 4.04.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Litigation</FONT></U></B><FONT face=serif size=2>. No Action is pending or, to the Knowledge of Buyer,
threatened against Buyer which seeks to delay or prevent the consummation of the
transactions contemplated hereby or which may adversely affect or restrict
Buyer&#146;s ability to consummate the transactions contemplated hereby. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 4.05.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Brokers and Finders</FONT></U></B><FONT face=serif size=2>. Neither Buyer, nor any of its officers, directors or
employees has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finder&#146;s fees in connection with the transactions
contemplated by this Agreement. </FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE V </FONT></B></P>
<P align=center><B><FONT face=serif size=2>COVENANTS OF THE PARTIES
</FONT></B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 5.01.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Employees</FONT></U></B><FONT face=serif size=2>. In addition to the Retained Liabilities, Seller shall retain
all liabilities and claims for salary, bonuses, back-pay, commissions, benefits
or other compensation based claims due employees or former employees of Seller
(whether or not engaged in the Business) arising prior to, as a result of, or
following the Closing.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 5.02.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Customers</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><FONT face=serif size=2>Immediately after the
Closing,</FONT><B><FONT face=serif size=2> </FONT></B><FONT face=serif size=2>Seller shall provide to Buyer a list of each of the customers of the
Business during the fiscal year ended March 31, 2008 and the quarter ended June
30, 2008, showing the approximate total sales by the Business to each such
customer during such periods.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 5.03.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Transfer Taxes</FONT></U></B><FONT face=serif size=2>. Notwithstanding any other provision of this Agreement, all
transfer, registration, stamp, documentary, sales and similar taxes (including
all applicable real estate transfer or gains taxes), and any penalties, interest
and additions to tax, incurred in connection with this Agreement or the transfer
of the Business and the Transferred Assets shall </FONT></P>
<P align=center><FONT face=serif size=2>17 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>be the responsibility of and be timely
paid by Seller. Seller and Buyer shall cooperate in the timely making of all
filings, returns, reports and forms as may be required in connection therewith.
</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
5.04.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Further Action</FONT></U></STRONG><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Each of the parties hereto shall execute such documents
(including, without limitation, the Ancillary Agreements) and other papers and
take such further actions as may be reasonably required or desirable to carry
out the provisions hereof and the transactions contemplated hereby, at or after
the Closing, to evidence the consummation of the transactions consummated
pursuant to this Agreement. Upon the terms and subject to the conditions hereof,
each of the parties hereto shall take, or cause to be taken, all actions and do,
or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement and to obtain in a timely manner all necessary
waivers and Consents and to effect all necessary registrations and filings.
Following the Closing, each party will afford the other party, its counsel and
its accountants, during normal business hours, reasonable access to the books,
records and other data relating to the Business in its possession with respect
to periods prior to the Closing and the right to make copies and extracts
therefrom, at the requesting party&#146;s expense, to the extent that such access may
be reasonably required by the requesting party in connection with (i) the
preparation of financial reports or tax returns, (ii) the determination or
enforcement of rights and obligations under this Agreement or any of the
Ancillary Agreements, (iii) compliance with the requirements of any Governmental
Authority, or (v) in connection with any actual or threatened Action or
proceeding, but in each case only to the extent that such access does not
unreasonably interfere with the business and operations of the party providing
such access. The requesting party shall provide a written request to access such
information (which written request shall include the reason for such party&#146;s
request to access such information) within a reasonable time prior to the
requested date of access. Further, each party agrees for a period extending for
five (5) years after the Closing Date not to destroy or otherwise dispose of any
such books, records and other data unless such party shall first offer in
writing to surrender such books, records and other data to the other party and
such other party does not agree in writing to take possession thereof during the
ten (10) day period after such offer is made. Any information obtained by a
party in accordance with this subsection shall be held confidential by such
party in accordance with Section 5.07. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 5.05.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Assets After the
Closing</FONT></U></B><FONT face=serif size=2>. If Seller shall, at any time
after the Closing, receive any Transferred Assets (including any payments
relating to any Transferred Agreements, to the extent performed after the
Closing), it shall promptly deliver such assets or property to Buyer.
</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
5.06.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Non-Compete</FONT></U></STRONG><FONT face=serif size=2>.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>From the Closing and for a period of seven (7)</FONT><B><FONT face=serif size=2> </FONT></B><FONT face=serif size=2>years thereafter (the
&#147;</FONT><U><FONT face=serif size=2>Non-Compete Period</FONT></U><FONT face=serif size=2>&#148;), Seller and Seller Guarantor shall not, and shall cause their
Affiliates not to, directly or indirectly, engage in, hold an interest in, lend
funds to, own, manage, operate, control, direct, be connected with as a
stockholder (other than as a holder of less than two percent (2%) </FONT></P>
<P align=center><FONT face=serif size=2>18 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>of a publicly-traded security), joint
venturer, partner or consultant, or otherwise engage or advise, specifically
with respect to the development, production, manufacture or sale of wet tantalum
capacitors, any Person seeking to engage in the business of developing,
producing, manufacturing or selling (through subcontract or otherwise) wet
tantalum capacitors anywhere in the world. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>If, at the time of enforcement of Section 5.06, a court or
arbitrator holds that the restrictions stated herein are unreasonable under the
circumstances then existing, the parties agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area determined to be reasonable under the
circumstances by such court or arbitrator, as applicable. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 5.07.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Confidential
Information</FONT></U></B><FONT face=serif size=2>. Seller acknowledges and
agrees that (i) it has Confidential Information (as defined below) and that such
Confidential Information does and will constitute valuable, special and unique
property of Buyer from and after the Closing Date and (ii) for a period of seven
(7) years after the Closing Date, it will not, directly or indirectly, and will
cause its Affiliates not to, disclose, reveal, divulge or communicate to any
Person other than authorized officers, directors and employees of Buyer or
employees or agents of Seller with a need to know, provided such Confidential
Information is not used in violation of this Agreement, or use or otherwise
exploit for its own benefit or for the benefit of anyone other than Buyer, any
Confidential Information. Seller shall not have any obligation to keep
confidential any Confidential Information if and to the extent disclosure
thereof is specifically required by Law; </FONT><I><FONT face=serif size=2>provided, however</FONT></I><FONT face=serif size=2>, that in the event
disclosure is required by applicable Law, Seller</FONT><B><FONT face=serif size=2> </FONT></B><FONT face=serif size=2>shall, to the extent reasonably
possible, provide Buyer with prompt notice of such requirement prior to making
any disclosure so that Buyer may seek an appropriate protective order. For
purposes of this Section 5.07, &#147;</FONT><U><FONT face=serif size=2>Confidential
Information</FONT></U><FONT face=serif size=2>&#148; shall mean any confidential
information with respect to the Business, including, without limitation, methods
of operation, pending or completed acquisitions of any company, division,
product line or other business unit, prices, fees, costs, plans, designs,
technology, inventions, trade secrets, know-how, software, marketing methods,
policies, plans, personnel, customers, suppliers, publishers, competitors,
markets or other specialized information or proprietary matters but shall not
include any such information to the extent that it relates to the business or
operations of Seller, other than the Business. The term &#147;</FONT><U><FONT face=serif size=2>Confidential Information</FONT></U><FONT face=serif size=2>&#148;
does not include, and there shall be no obligation hereunder with respect to,
information that (a) is generally available to the public on the date of this
Agreement, (b) becomes generally available to the public other than as a result
of a disclosure by Seller</FONT><B><FONT face=serif size=2> </FONT></B><FONT face=serif size=2>not otherwise permissible thereunder or (c) Seller learns from
other sources where such sources have not violated their confidentiality
obligation to Buyer. Nothing herein shall be construed as a license or other
grant to Seller or any of its Affiliates of permission to use the Transferred
Intellectual Property whether during or after the aforesaid seven (7) year
period. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 5.08.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Vishay Intellectual
Property</FONT></U></B><FONT face=serif size=2>. Seller acknowledges that the
Intellectual Property listed on </FONT><U><FONT face=serif size=2>Schedule
5.08</FONT></U><FONT face=serif size=2> (the &#147;</FONT><U><FONT face=serif size=2>Vishay Intellectual Property</FONT></U><FONT face=serif size=2>&#148;) is
owned by Buyer Guarantor or an Affiliate of Buyer Guarantor. Seller covenants
not to, directly or indirectly, dispute, challenge, or impair the validity or
enforceability of, or any right, title or interest in or to, the Vishay
Intellectual Property, exclusively as it relates to wet tantalum capacitors and
has not expired under applicable Law</FONT><B><FONT face=serif size=2>.
</FONT></B><FONT face=serif size=2></FONT></P>
<P align=center><FONT face=serif size=2>19 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 5.09.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Access</FONT></U></B><FONT face=serif size=2>. Each party shall provide the other party reasonable access during
regular business hours to all records relating to the Business (with the right
to photocopy at the requesting party&#146;s expense) in connection with any and all
regulatory compliance by either party or investigation by any Governmental
Authority of Seller or Buyer or the Business prior to or after the Closing
(including, without limitation, the Mexican Ministry of Treasury and Public
Credit, the Mexican Internal Revenue Service and environmental regulatory
agencies) and pending or threatened litigation matters to which Seller or Buyer
may be or hereafter becomes subject with respect to the Business. </FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE VI </FONT></B></P>
<P align=center><B><FONT face=serif size=2>INDEMNIFICATION </FONT></B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 6.01.</FONT></B><B><FONT face=sans-serif size=2>
</FONT></B><B><U><FONT face=serif size=2>Survival</FONT></U></B><FONT face=serif size=2>. The parties hereto agree that the representations and warranties of the
parties contained in this Agreement, any schedule hereto or any certificate
delivered pursuant hereto, and the indemnification obligations in Sections
6.02(a)(i) and 6.02(b)(i) with respect to such representations and warranties,
shall terminate twelve (12) months after the Closing Date; provided that (a) the
representations and warranties contained in 3.18 (Taxes), 3.19 (Brokers and
Finders) and 4.05 (Brokers and Finders), and the indemnification obligations
related thereto, shall terminate thirty (30) days following the expiration of
the applicable statutory period of limitations and (b) the representations and
warranties contained in 3.05(a) (Transferred Intellectual Property), and the
indemnification obligations related thereto, shall terminate thirty-six (36)
months after the Closing Date, and (c) the representations and warranties
contain in Sections 3.01 (Organization and Authority of Seller), 3.05(c) (Title
to Transferred Assets), 3.15 (Environmental Compliance) and 4.01 (Organization
and Authority of Buyer), and the indemnification obligations related thereto,
shall survive the Closing indefinitely; provided that if a claim shall have been
made in good faith with respect to any representation or warranty prior to the
expiration of the applicable survival period such claim shall continue to be
subject to indemnification notwithstanding the expiration of such period. The
covenants and agreements of the parties contained in this Agreement shall
survive and remain in full force and effect for the applicable period specified
therein, or if no such period is specified, indefinitely. The provisions of this
Article VI shall survive for so long as any other Section of this Agreement
shall survive. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section
6.02.</STRONG></FONT><STRONG><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Indemnification Obligations</FONT></U></STRONG><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Seller shall indemnify, defend and hold harmless Buyer and any
subsidiary, associate, Affiliate, director, officer, member, manager or agent of
Buyer, and their respective representatives, successors and permitted assigns
(collectively, the &#147;</FONT><U><FONT face=serif size=2>Buyer</FONT><FONT face=serif size=2> </FONT><FONT face=serif size=2>Indemnified
Parties</FONT></U><FONT face=serif size=2>&#148;) from and against, and pay on behalf
of or reimburse such party in respect of, as and when incurred, any and all
losses, liabilities, demands, claims, Actions, costs, damages, judgments, debts,
settlements, assessments, deficiencies, Taxes, penalties, fines or expenses,
whether or not arising out of any claims by or on behalf of a third party,
including interest, penalties, reasonable attorneys&#146; fees and expenses and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing (collectively, &#147;</FONT><U><FONT face=serif size=2>Losses</FONT></U><FONT face=serif size=2>&#148;) which any such party may
suffer, sustain or become subject to, as a result of, in connection with, or
relating to or by virtue of: </FONT></P>
<P align=center><FONT face=serif size=2>20 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="99%">
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(i)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>any inaccuracy in, or breach of, any representation or warranty
      made by either Seller under this Agreement, the Bill of Sale, Assignment
      and Assumption Agreements, or the Escrow Agreement, including any
      certificate, exhibit or schedule provided by Seller in connection with the
      transactions contemplated herein; </FONT></P>
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(ii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>any breach or non-fulfillment of any covenant or agreement on the
      part of Seller under this Agreement, the Bill of Sale, Assignment and
      Assumption Agreements, the Trademark License Agreement, or the Escrow
      Agreement; </FONT></P>
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>the ownership or operation of the Transferred Assets on or prior to
      the Closing Date, or the conduct or operation of the Business on or prior
      to the Closing Date, or the activities of Seller in connection with the
      Transferred Assets or the Business on or prior to the Closing Date;
      </FONT></P>
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iv)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>any liabilities of Seller arising out of (x) any employee dispute
      or the violation of any Mexican labor Law, rule or regulation or (y) the
      violation of any Mexican Environmental Law, rule or regulation.
</FONT></P>
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(v)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Seller&#146;s failure to comply with applicable bulk sale or bulk
      transfer laws as set forth in Section 7.04; </FONT></P>
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(vi)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>any fees, expenses or other payments incurred or owed by Seller to
      any agent, broker, investment banker or other firm or Person retained or
      employed in connection with the transactions contemplated by this
      Agreement; or</FONT></P>
      <P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(vii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>the Retained
      Liabilities. </FONT></P></TD></TR></TABLE>
<P align=justify><FONT face=serif size=2>For the avoidance of doubt, in no event
will Seller be required to indemnify any Buyer Indemnified Party for any Loss
relating to the assignment of any Contract in connection with this Agreement or
the failure by Buyer or Seller to obtain a third party consent to the assignment
of any Contract in connection with this Agreement, except to the extent of the
obligations of Seller under Section 1.06. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Buyer shall indemnify, defend and hold harmless Seller and any
subsidiary, associate, Affiliate, director, officer, stockholder or agent of
Seller and their respective representatives, successors and permitted assigns
(collectively, the &#147;</FONT><U><FONT face=serif size=2>Seller</FONT><FONT face=serif size=2> </FONT><FONT face=serif size=2>Indemnified
Parties</FONT></U><FONT face=serif size=2>&#148;) from and against, and pay on behalf
of or reimburse such party in respect of, as and when incurred, any and all
Losses which any such party may suffer, sustain or become subject to, as a
result of, in connection with, or relating to or by virtue of: </FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR>
    <TD width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="99%">
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(i)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>any inaccuracy in, or breach of, any representation or warranty
      made by Buyer under this Agreement, the Bill of Sale, Assignment and
      Assumption Agreements, or the Escrow Agreement, including any certificate
      or exhibit provided by Buyer in connection with the transactions
      contemplated herein;</FONT></P>
      <P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(ii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>any breach or non-fulfillment of any covenant or agreement on the
      part of Buyer under this Agreement, the Bill of Sale, Assignment and
      Assumption Agreements, or the Escrow
Agreement;</FONT></P></TD></TR></TABLE>
<P align=center><FONT face=serif size=2>21 </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<DIV style="PADDING-LEFT: 30pt">
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iii)
</FONT><FONT face=serif size=2>the ownership or operation of the Transferred
Assets after the Closing Date, or the conduct or operation of the Business after
the Closing Date, or the activities of Buyer in connection with the Transferred
Assets or the Business after the Closing Date, except for the Retained
Liabilities and subject to the provisions of the Transitions Services
Agreement;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iv)
</FONT><FONT face=serif size=2>any fees, expenses or other payments incurred or
owed by Buyer to any agent, broker, investment banker or other firm or Person
retained or employed in connection with the transactions contemplated by this
Agreement; or</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(v) </FONT><FONT face=serif size=2>the Assumed Liabilities.</FONT></P></DIV>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c) </FONT><FONT face=serif size=2>The right to
indemnification or any other remedy based on any representation, warranty,
covenant or agreement hereunder shall not be affected by any investigation
conducted at any time, or any knowledge acquired (or capable of being acquired)
at any time, whether before or after the execution and delivery of this
Agreement or the Closing, with respect to the accuracy or inaccuracy of, or
compliance with, any such representation, warranty, covenant or agreement. The
waiver of any condition based on the accuracy of any such representation or
warranty, or on the performance of or compliance with any such covenant or
agreements, will not affect the right to indemnification or any other remedy
based on such representations, warranties, covenants and agreements.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section 6.03.
</STRONG></FONT><STRONG><U><FONT face=serif size=2>Indemnification
Procedure</FONT></U><FONT face=serif size=2>.</FONT></STRONG></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a) </FONT><FONT face=serif size=2>If any Buyer Indemnified
Party or Seller Indemnified Party (collectively, the &#147;</FONT><U><FONT face=serif size=2>Indemnified Parties</FONT></U><FONT face=serif size=2>&#148;) intends to seek
indemnification pursuant to this Article VI, such Indemnified Party shall
promptly notify Seller, if the Indemnified Party is a Buyer Indemnified Party
(the &#147;</FONT><U><FONT face=serif size=2>Seller Indemnifying
Parties</FONT></U><FONT face=serif size=2>&#148;), or Buyer, if the Indemnified Party
is a Seller Indemnified Party (the &#147;</FONT><U><FONT face=serif size=2>Buyer
Indemnifying Parties</FONT></U><FONT face=serif size=2>&#148; and, together with
Seller Indemnifying Parties, the &#147;</FONT><U><FONT face=serif size=2>Indemnifying
Parties</FONT></U><FONT face=serif size=2>&#148;), in writing of such claim with
reasonable particularity. The Indemnified Party will provide the Indemnifying
Parties with prompt notice of any third party claim in respect of which
indemnification is sought. The failure to provide such notice will not affect
any rights hereunder except to the extent the Indemnifying Parties are
materially prejudiced thereby.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>If such claim involves a claim by a third party against the Indemnified
Parties, the Indemnifying Parties may, within thirty (30) calendar days after
receipt of such notice and upon notice to the Indemnified Parties, assume,
through counsel of their own choosing and at their own expense, the settlement
or defense thereof, and the Indemnified Parties shall reasonably cooperate with
them in connection therewith. In the event the Indemnifying Parties elect to
assume the settlement or defense of such third party claim, the Indemnified
Parties shall be permitted to participate in such settlement or defense through
one counsel chosen (and one local counsel in any applicable jurisdiction) by
them, the expense of which will be the obligation of the Indemnified Parties;
unless an Indemnified Party is a named party to such action or suit and the
Indemnified Parties have reasonably determined that there may be a conflict of
interest between the Indemnifying Parties and such Indemnified Party, then the
Indemnifying Parties shall pay the reasonable fees and expenses of one counsel
chosen (and one</FONT></P>
<P align=center><FONT face=serif size=2>22</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>local counsel in any applicable
jurisdiction) by the Indemnified Parties. Notwithstanding anything in this
Section 6.03 to the contrary, no Indemnifying Party may, without the prior
written consent of the Indemnified Parties, such consent not to be unreasonably
withheld, settle or compromise any action or consent to the entry of any
judgment, unless the terms of such settlement release the Indemnified Parties
from any and all liability with respect to such action or suit and do not
contain any admission of liability or culpability of the Indemnified Parties. So
long as the Indemnifying Parties are contesting any such claim in good faith,
the Indemnified Parties shall not pay or settle any such claim without the
Indemnifying Parties&#146; Consent, which Consent shall not to be unreasonably
withheld or delayed. If the Indemnifying Parties do not give notice within a
reasonable time that they elect to assume the settlement or defense of such
claim or suit, then the Indemnified Parties may conduct and control, through
counsel of their own choosing and at the expense of the Indemnifying Parties,
the settlement or defense thereof, and the Indemnifying Parties shall cooperate
with it in connection therewith; provided, however, that (i) the Indemnified
Parties shall not consent to the entry of any judgment or to any settlement of
such claim without the prior written consent of the Indemnifying Parties, not to
be unreasonably withheld or delayed; and (ii) the Indemnifying Parties shall
have the right at any point to participate in the Indemnified Parties&#146; defense,
to attend meetings and conferences, and to review such information and documents
in the Indemnified Parties&#146; possession as they may reasonably request concerning
such action or suit except where such participation, attendance or review would
(x) void any claim of privilege by an Indemnified Party or (y) materially impair
any legal defense or claim of an Indemnified Party. The failure of the
Indemnified Parties to participate in, conduct or control such defense shall not
relieve the Indemnifying Parties of any obligation they may have
hereunder.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><STRONG>Section 6.04.
</STRONG></FONT><STRONG><U><FONT face=serif size=2>Indemnification
Amounts</FONT></U><FONT face=serif size=2>.</FONT></STRONG></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a) </FONT><U><FONT face=serif size=2>Basket</FONT></U><FONT face=serif size=2>. Notwithstanding anything contained herein to the contrary,
an Indemnifying Party shall not be liable for any claim for indemnification
pursuant to Section 6.02(a)(i) or 6.02(b)(i) hereto unless and until the dollar
amount of all indemnifiable Losses in the aggregate exceeds $250,000 (the
&#147;</FONT><U><FONT face=serif size=2>Basket</FONT></U><FONT face=serif size=2>&#148;),
in which case the Indemnifying Party will be obligated to indemnify the
Indemnified Party for all indemnifiable Losses in excess of $250,000.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b) </FONT><U><FONT face=serif size=2>Seller&#146;s
Cap</FONT></U><FONT face=serif size=2>. Subject to Section 6.04(d), (f), and
(g), the maximum aggregate liability of all Seller Indemnified Parties under
Section 6.02(a)(i) for all Losses shall be 30% of the Purchase Price
(&#147;</FONT><U><FONT face=serif size=2>Seller&#146;s Cap</FONT></U><FONT face=serif size=2>&#148;).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c) </FONT><U><FONT face=serif size=2>Buyer&#146;s
Cap</FONT></U><FONT face=serif size=2>. Subject to Section 6.04(e), (f), and
(g), the maximum aggregate liability of all Buyer Indemnified Parties under
Section 6.02(b)(i) for all Losses shall be 30% of the Purchase Price
(&#147;</FONT><U><FONT face=serif size=2>Buyer&#146;s Cap</FONT></U><FONT face=serif size=2>&#148;).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d) </FONT><U><FONT face=serif size=2>Exclusions from Seller&#146;s
Cap</FONT></U><FONT face=serif size=2>. Notwithstanding the foregoing, the
following Losses shall not be subject to the provisions of Seller&#146;s Cap and a
Buyer Indemnified Party shall be entitled to indemnification with respect to
such Losses in accordance with this Article VI as though Seller&#146;s Cap was not a
part of this Agreement:</FONT></P>
<P style="PADDING-LEFT: 30pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(i) </FONT><FONT face=serif size=2>Losses relating to or
caused by or resulting from the breach of the representations and warranties
contained in Sections 3.01 (Organization and Authority of Seller), 3.05(d)
(Title to Transferred Assets) and 3.20 (Brokers and Finders); and</FONT></P>
<P align=center><FONT face=serif size=2>23</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P style="PADDING-LEFT: 30pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(ii) </FONT><FONT face=serif size=2>Losses relating to, caused
by or resulting from the actual fraud or intentional misrepresentation of Seller
under this Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(e) </FONT><U><FONT face=serif size=2>Exclusions from Buyer&#146;s
Cap</FONT></U><FONT face=serif size=2>. Notwithstanding the foregoing, the
following Losses shall not be subject to the provisions of Buyer&#146;s Cap and a
Seller Indemnified Party shall be entitled to indemnification with respect to
such Losses in accordance with this Article VI as though Buyer&#146;s Cap was not a
part of this Agreement:</FONT></P>
<P style="PADDING-LEFT: 30pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(i) </FONT><FONT face=serif size=2>Losses relating to or
caused by or resulting from the breach of the representations and warranties
contained in Sections 4.01 (Organization and Authority of Buyer) and 4.05
(Brokers and Finders); and</FONT></P>
<P style="PADDING-LEFT: 30pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(ii) </FONT><FONT face=serif size=2>Losses relating to, caused
by or resulting from the actual fraud or intentional misrepresentation of Buyer
under this Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(f) </FONT><U><FONT face=serif size=2>Computation of
Losses</FONT></U><FONT face=serif size=2>. The amount of any liability of Seller
under Section 6.02(a) shall be computed net of any tax benefit to Buyer
Indemnified Parties actually received by Buyer Indemnified Parties, net of any
insurance proceeds actually received by Buyer Indemnified Parties, and net of
any indemnity, contribution, or other similar payment actually received by any
Buyer Indemnified Party with respect to the matter out of which such liability
arose. The amount of any liability of Buyer under Section 6.02(b) shall be
computed net of any tax benefit to Seller Indemnified Parties actually received
by Seller Indemnified Parties, net of any insurance proceeds actually received
by Seller Indemnified Parties, and net of any indemnity, contribution, or other
similar payment actually received by any Seller Indemnified Party with respect
to the matter out of which such liability arose.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(g) </FONT><U><FONT face=serif size=2>No Special
Damages</FONT></U><FONT face=serif size=2>. Notwithstanding anything to the
contrary contained herein, no Indemnifying Party shall be liable or responsible
to any Indemnified Party for special, punitive, incidental, consequential, or
multiplied damages or for lost profits, except as reducing the value of the
Business or the Transferred Assets and except as required to be paid to a
third-party claimant.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 6.05. </FONT><U><FONT face=serif size=2>Tax Treatment of
Indemnification</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG>
For all Tax purposes, the parties hereto agree to treat (and shall cause each of
their respective Affiliates to treat) any indemnity payment under this Agreement
as an adjustment to the Purchase Price, except as otherwise required by
applicable Law. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 6.06. </FONT><U><FONT face=serif size=2>Escrow
Amount</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> The
obligation of Seller under Section 6.02(a) shall be satisfied first from the
Escrow Amount and, if the Escrow Amount is inadequate to provide indemnification
to Buyer as provided in Section 6.02(a), from Seller, subject to the limitations
set forth in Section 6.04(a), (b), (f) and (g). </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 6.07. </FONT></B><B><U><FONT face=serif size=2>Exclusive
Remedy</FONT></U></B><B><FONT face=serif size=2>. </FONT></B><FONT face=serif size=2>The right to receive indemnification pursuant to this Article VI shall be
the sole and exclusive remedy of any Indemnified Party with respect to liability
of Seller and Buyer for a breach or inaccuracy of a representation or warranty
or the</FONT></P>
<P align=center><FONT face=serif size=2>24</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>breach of any covenant in this
Agreement, the Bill of Sale, Assignment and Assumption Agreements, the Trademark
License Agreement, the Escrow Agreement, and any certificate furnished
hereunder, or conduct otherwise relating to the negotiation and completion of
the transactions contemplated in this Agreement; provided, however, that nothing
herein shall preclude a party from seeking specific performance or injunctive
relief or bringing an action for fraud or intentional
misrepresentation.</FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE VII</FONT></B></P>
<P align=center><B><FONT face=serif size=2>GENERAL PROVISIONS</FONT></B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 7.01.</FONT><FONT face=sans-serif> </FONT><U><FONT face=serif size=2>Publicity</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG>
No publicity release or announcement concerning this Agreement, the Ancillary
Agreements or the transactions contemplated hereby and thereby shall be issued
without advance approval of the form and substance thereof by Seller and Buyer,
except as many otherwise be required by applicable Law (in which case the party
making such release or announcement will provide concurrent or, if practicable,
prior notice to the other parties hereto). Neither party shall take any action
which is intended, or could reasonably be expected, to harm, disparage, defame,
slander, or lead to unwanted or unfavorable publicity for the other party with
respect to the Business or the transactions contemplated by this Agreement, or
otherwise take any action which might detrimentally affect the reputation,
image, relationships or public view of the other party with respect to the
Business or the transactions contemplated by this Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 7.02.</FONT><FONT face=sans-serif> </FONT><U><FONT face=serif size=2>Specific Performance</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> The parties hereto agree that money damages would not
be a sufficient remedy for a breach of Sections 5.03, 5.04, 5.05, 5.06 and 7.01
of this Agreement by Seller or Buyer because of the difficulty of ascertaining
the amount of damage that will be suffered in connection therewith, that each
party would be irreparably damaged in the event any such obligation of the other
party is not performed in accordance with its specific terms and that each party
shall be entitled to equitable relief (including injunction and specific
performance) in any action instituted in any court of the United States or any
state thereof having subject matter jurisdiction, as a remedy, for any breach or
to prevent any breach of such provisions. Such remedies shall not be deemed to
be exclusive for a breach or anticipatory breach of this Agreement, but shall be
in addition to all other remedies available at law or equity. The parties waive
any defense that a remedy at law is adequate and any requirement to post bond or
provide similar security in connection with actions instituted for injunctive
relief or specific performance of this Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 7.03.</FONT><FONT face=sans-serif> </FONT><U><FONT face=serif size=2>Expenses</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG>
All costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 7.04.</FONT><FONT face=sans-serif> </FONT><U><FONT face=serif size=2>Bulk Transfer Laws</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> Buyer hereby waives compliance by Seller with any
applicable bulk sale or bulk transfer laws of any jurisdiction in connection
with the sale of the Business to Buyer; </FONT><I><FONT face=serif size=2>provided, however,</FONT></I><FONT face=serif size=2> that nothing in
this Section 7.04 shall be construed (i) as an indication that Buyer or Seller
has determined that any bulk sale or transfer law is applicable to the sale of
the Business or (ii) to undermine Seller&#146;s absolute obligation to pay the
Retained Liabilities.</FONT></P>
<P align=center><FONT face=serif size=2>25</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 7.05. </FONT><U><FONT face=serif size=2>Notices</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made (i) as of the date
delivered if delivered personally; (ii) five (5) days after being mailed by
registered or certified mail, postage prepaid, return receipt requested; (iii)
one (1) business day after being sent via a nationally recognized overnight
courier service; or (iv) upon receipt of electronic or other confirmation of
transmission if sent via facsimile to the parties or their assignees at the
following addresses and facsimile numbers, or at such other addresses or
facsimile numbers as the parties may designate by written notice in accordance
with this Section 7.05, except that notices of changes of address shall be
effective upon receipt:</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(a)</FONT><FONT face=sans-serif> </FONT><FONT face=serif size=2>if to Seller:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>KEMET
      Electronics Corporation</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>2835 KEMET
      Way</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Simpsonville, SC
      29681</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Tel: (864)
      963-6300</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Fax: (954)
      766-2805</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Attention: R.
      James (&#147;Jamie&#148;) Assaf, Esq., Vice President, General Counsel</FONT>&nbsp;
    </TD></TR>
  <TR>
    <TD width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="98%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>with a copy
      to:</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="98%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Wyche Burgess
      Freeman &amp; Parham, P.A.</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>44 East
      Camperdown Way</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Greenville, SC
      29601-3512</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Fax: (864)
      235-8900</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Attn: Carl F.
      Muller, Esq.</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(b)
</FONT><FONT face=serif size=2>if to Buyer:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Vishay
      Intertechnology, Inc.</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>63 Lancaster
      Avenue</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Malvern, PA
      19355</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Fax:
      </FONT><FONT face=serif size=2>(610) 889-2161</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Attn:
      </FONT><FONT face=serif size=2>Dr. Lior Yahalomi, Chief Financial
      Officer</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="1%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="98%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>with a copy
      to:</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="98%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Kramer Levin
      Naftalis &amp; Frankel LLP</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>1177 Avenue of
      the Americas</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>New York, New
      York 10036</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Fax: (212)
      715-8000</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%"><FONT face=serif size=2>Attn:
      </FONT><FONT face=serif size=2>Abbe L. Dienstag, Esq.</FONT>&nbsp;
  </TD></TR></TABLE><BR>
<P align=center><FONT face=serif size=2>26</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 7.06.</FONT><FONT face=sans-serif> </FONT><U><FONT face=serif size=2>Headings</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG>
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 7.07. </FONT><U><FONT face=serif size=2>Severability</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the greatest extent
possible.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 7.08. </FONT><U><FONT face=serif size=2>Assignment</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG>
The rights and obligations of each party under this Agreement may not be
assigned by any party, whether by operation of law or otherwise, without the
express written consent of the other party hereto, except that Buyer may assign
its rights and obligations to a wholly-owned subsidiary of Buyer Guarantor at
any time.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>Section 7.09. </FONT></B><B><U><FONT face=serif size=2>Entire Agreement;
No Third Party Beneficiaries</FONT></U></B><B><FONT face=serif size=2>.
</FONT></B><FONT face=serif size=2>This Agreement (including the exhibits and
schedules attached hereto) and other documents delivered at the Closing pursuant
hereto contain the entire understanding of the parties in respect of its subject
matter and supersede all prior agreements and understandings (oral or written)
between or among the parties with respect to such subject matter. The parties
agree that prior drafts of this </FONT><FONT face=serif size=2>Agreement shall
not be deemed to provide any evidence as to the meaning of any provision hereof
or the intent of the parties with respect thereto. The exhibits and schedules
constitute a part hereof as though set forth in full above. Except for persons
expressly stated herein to be indemnitees or as otherwise expressly stated
herein, this Agreement is not intended to confer upon any Person, other than the
parties hereto, any rights or remedies hereunder.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 7.10. </FONT><U><FONT face=serif size=2>Governing
Law</FONT></U></STRONG><FONT face=serif size=2><STRONG>. </STRONG>This
Agreement, the schedules attached hereto and the Ancillary Agreements shall be
governed by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed and to be performed in that state, without
regard to principles of conflicts of laws.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><FONT face=serif size=2>Section 7.11. </FONT><U><FONT face=serif size=2>Counterparts;
Effectiveness of Agreement</FONT></U></STRONG><FONT face=serif size=2><STRONG>.</STRONG> This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.</FONT></P>
<P align=center><FONT face=serif size=2>27</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>IN WITNESS WHEREOF, Seller and Buyer have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.</FONT></P>
<DIV align=right>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="99%" colSpan=3><FONT face=serif size=2>KEMET
      ELECTRONICS CORPORATION</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><FONT size=2>By:</FONT><FONT size=3>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="68%"><FONT face=serif size=2>/s/ Per-Olof Loof</FONT>&nbsp; </TD>
    <TD noWrap align=left width="30%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%" colSpan=2><FONT face=serif size=2>&nbsp;
      Name:&nbsp; </FONT><FONT face=serif size=2>Per-Olof Loof</FONT>&nbsp;
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%" colSpan=2><FONT size=2><FONT face=serif>&nbsp; Title:</FONT>&nbsp;&nbsp;&nbsp; <FONT face=serif>Chief
      Executive Officer</FONT></FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="99%" colSpan=3><FONT face=serif size=2>SILICONIX TECHNOLOGY C.V.</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"><FONT size=2>By:</FONT><FONT size=3>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="68%"><FONT face=serif size=2>/s/ Steven Klausner</FONT>&nbsp; </TD>
    <TD noWrap align=left width="30%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%" colSpan=2><FONT face=serif size=2>&nbsp;
      Name:&nbsp; </FONT><FONT face=serif size=2>Steven Klausner</FONT>&nbsp;
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%" colSpan=2><FONT face=serif size=2>&nbsp;
      Title:&nbsp;&nbsp;&nbsp; </FONT><FONT face=serif size=2>Assistant
      Treasurer</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%" colSpan=2><FONT face=serif size=2>&nbsp;
      On behalf of Siliconix incorporated, member</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%" colSpan=2><FONT face=serif size=2>&nbsp;
      of Vishay Siliconix LLC, General Partner of</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="98%" colSpan=2><FONT face=serif size=2>&nbsp;
      Siliconix Technology C.V.</FONT>&nbsp; </TD></TR></TABLE></DIV><BR>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=center><FONT face=serif size=2>GUARANTEE</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Vishay
Intertechnology, Inc. (&#147;</FONT><FONT face=serif size=2><U>Buyer
Guarantor</U></FONT><FONT face=serif size=2>&#148;) irrevocably guarantees each and
every representation, warranty, covenant, agreement and other obligation of
Buyer, and/or any of their respective permitted assigns (and where any such
representation or warranty is made to the knowledge of Buyer, such
representation or warranty shall be deemed made to the knowledge of Buyer
Guarantor), and the full and timely performance of their respective obligations
under the provisions of the foregoing Agreement. This is a guarantee of payment
and performance, and not of collection, and Buyer Guarantor acknowledges and
agrees that this guarantee is full and unconditional, and no release or
extinguishment of Buyer&#146;s obligations or liabilities (other than in accordance
with the terms of the Agreement), whether by decree in any bankruptcy proceeding
or otherwise, shall affect the continuing validity and enforceability of this
guarantee, as well as any provision requiring or contemplating performance by
Buyer Guarantor.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Buyer
Guarantor hereby waives, for the benefit of Seller, (i) any right to require
Seller as a condition of payment or performance by Buyer Guarantor, to proceed
against Buyer or pursue any other remedy whatsoever and (ii) to the fullest
extent permitted by law, any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, except to the extent that any such defense is available to
Buyer.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Without
limiting in any way the foregoing guarantee, Buyer Guarantor covenants and
agrees to take all actions to enable Buyer to adhere to each of the provisions
of the Agreement which requires an act or omission on the part of Buyer
Guarantor or any of its subsidiaries to enable Buyer to comply with its
obligations under the Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>The
provisions of </FONT><FONT face=serif size=2><U>Article VII</U></FONT><FONT face=serif size=2> of the Agreement are incorporated herein, </FONT><I><FONT face=serif size=2>mutatis mutandis</FONT></I><FONT face=serif size=2>, except
that notices and other communications hereunder to Buyer Guarantor shall be
delivered to Vishay Intertechnology, Inc., 63 Lancaster Avenue, Malvern, PA
19355, Attn: Lior Yahalomi, Chief Financial Officer, Fax No. (610) 889-2161
(with a copy as provided therefor in Section 7.05).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>We understand that Seller is relying
on this guarantee in entering into the Agreement and may enforce this guarantee
as if Buyer Guarantor were a party thereto.</FONT></P>
<DIV align=right>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%" colSpan=3><FONT face=serif size=2>VISHAY INTERTECHNOLOGY INC.</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="2%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD width="2%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"><FONT size=2>By:</FONT><FONT size=3>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="98%" colSpan=2><FONT face=serif size=2>/s/ Steven Klausner</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="4%"><FONT face=serif size=2>Name:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>Steven
      Klausner</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="4%"><FONT face=serif size=2>Title:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>Vice President
      and Treasurer</FONT>&nbsp; </TD></TR></TABLE></DIV><BR>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=center><FONT face=serif size=2>GUARANTEE</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>KEMET
Corporation (&#147;</FONT><FONT face=serif size=2><U>Seller Guarantor</U></FONT><FONT face=serif size=2>&#148;) irrevocably guarantees each and every representation,
warranty, covenant, agreement and other obligation of Seller, and/or any of
their respective permitted assigns (and where any such representation or
warranty is made to the knowledge of Seller, such representation or warranty
shall be deemed made to the knowledge of Seller Guarantor), and the full and
timely performance of their respective obligations under the provisions of the
foregoing Agreement. This is a guarantee of payment and performance, and not of
collection, and Seller Guarantor acknowledges and agrees that this guarantee is
full and unconditional, and no release or extinguishment of Seller&#146;s obligations
or liabilities (other than in accordance with the terms of the Agreement),
whether by decree in any bankruptcy proceeding or otherwise, shall affect the
continuing validity and enforceability of this guarantee, as well as any
provision requiring or contemplating performance by Seller Guarantor.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Seller
Guarantor hereby waives, for the benefit of Seller, (i) any right to require
Seller as a condition of payment or performance by Seller Guarantor, to proceed
against Seller or pursue any other remedy whatsoever and (ii) to the fullest
extent permitted by law, any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, except to the extent that any such defense is available to
Seller.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Without
limiting in any way the foregoing guarantee, Seller Guarantor covenants and
agrees to take all actions to enable Seller to adhere to each of the provisions
of the Agreement which requires an act or omission on the part of Seller
Guarantor or any of its subsidiaries to enable Seller to comply with its
obligations under the Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>The
provisions of </FONT><FONT face=serif size=2><U>Article VII</U></FONT><FONT face=serif size=2> of the Agreement are incorporated herein, </FONT><I><FONT face=serif size=2>mutatis mutandis</FONT></I><FONT face=serif size=2>, except
that notices and other communications hereunder to Seller Guarantor shall be
delivered to KEMET Corporation, 2835 KEMET Way, Simpsonville, SC 29606, Attn:
William Lowe, Jr., Executive Vice President and Chief Financial Officer, Fax No.
(864) 963-6303 (with a copy as provided therefor in Section 7.05).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>We understand that Buyer is relying
on this guarantee in entering into the Agreement and may enforce this guarantee
as if Seller Guarantor were a party thereto.</FONT></P>
<DIV align=right>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="100%" colSpan=3><FONT face=serif size=2>KEMET
      CORPORATION</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="2%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR>
    <TD width="2%"></TD>
    <TD width="98%" colSpan=2>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"><FONT size=2>By:</FONT><FONT size=3>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="98%" colSpan=2><FONT face=serif size=2>/s/ Per-Olof Loof</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%">&nbsp;</TD>
    <TD noWrap align=left width="4%"><FONT face=serif size=2>Name:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>Per-Olof
      Loof</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="2%"></TD>
    <TD noWrap align=left width="4%"><FONT face=serif size=2>Title:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="94%"><FONT face=serif size=2>Chief Executive
      Officer</FONT>&nbsp; </TD></TR></TABLE></DIV><BR>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=center><B><U><FONT face=serif size=2>EXHIBIT A</FONT></U></B></P>
<P align=center><B><FONT face=serif size=2>Definitions</FONT></B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>As used
in this Agreement, the following terms shall have the following meanings (such
definitions to be equally applicable to both the singular and plural forms of
the terms defined):</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Action</FONT></U><FONT face=serif size=2>&#148; means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Affiliate</FONT></U><FONT face=serif size=2>&#148; with respect to any specified person, means a person that directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such specified person.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Ancillary Agreements</FONT></U><FONT face=serif size=2>&#148; means the Trademark License Agreement, the Bill of Sale,
Assignment and Assumption Agreements, the Transitions Services Agreement, the
Commodatum Agreement and the Escrow Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Arco Intellectual
Property</FONT></U><FONT face=serif size=2>&#148; means all Intellectual Property (a)
owned by Seller, (b) used or to be used exclusively in the manufacture of wet
tantalum capacitors and (c) purchased from Blue Sky (Lux) S.&#224;.r.l. pursuant to
the Sale and Purchase Agreement, dated August 10, 2007 by and between Seller and
Blue Sky (Lux) S.&#224;.r.l.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Arco Tangible Assets</FONT></U><FONT face=serif size=2>&#148; means all fixed assets, machinery, equipment, tools and
parts (a) owned by Seller, (b) used or to be used in the manufacture of the wet
tantalum capacitors listed on </FONT><U><FONT face=serif size=2>Schedule
3.05(a)(ii)</FONT></U><FONT face=serif size=2> and (c) purchased from Blue Sky
(Lux) S.&#224;.r.l. pursuant to the Sale and Purchase Agreement dated August 10, 2007
by and between Seller and Blue Sky (Lux) S.&#224;.r.l., other than the equipment
listed on </FONT><U><FONT face=serif size=2>Schedule
1.01(b)(xiv)</FONT></U><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Assumed Liabilities</FONT></U><FONT face=serif size=2>&#148; means the liabilities of Seller that Buyer is assuming
pursuant to the Assignment and Assumption Agreement and Section
1.02(a).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Basket</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to
that term in Section 6.04(a).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Bill of Sale, Assignment and
Assumption Agreements</FONT></U><FONT face=serif size=2>&#148; means the Bills of
Sale, Assignment and Assumption Agreements, substantially in the forms as
</FONT><U><FONT face=serif size=2>Exhibit C</FONT></U><FONT face=serif size=2>
hereto, being delivered simultaneously herewith pursuant to which Seller and
Arcotronics are conveying to Buyer the Transferred Assets and pursuant to which
Buyer is assuming the Assumed Liabilities.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Business Accounting
Principles</FONT></U><FONT face=serif size=2>&#148; means GAAP, except to the extent
that the accounting principles used to determine the financial statements of the
Business are not consistent with GAAP, as shown on </FONT><U><FONT face=serif size=2>Schedule 3.04(c)</FONT></U><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Buyer Indemnified
Parties</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to that
term in Section 6.02(a).</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Buyer Indemnifying
Parties</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to that
term in Section 6.03(a).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Buyer&#146;s Cap</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned
to that term in Section 6.04(c).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Closing</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to
that term in Section 2.01.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Closing Date</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned
to that term in Section 2.01.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Closing Date Cash Payment</FONT></U><FONT face=serif size=2>&#148; has the
meaning assigned to that term in Section 1.04(a).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Consent</FONT></U><FONT face=serif size=2>&#148; means any approval, consent, ratification, waiver, lapse of any waiting
period or other authorization.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Confidential Information</FONT></U><FONT face=serif size=2>&#148; has the
meaning assigned to that term in Section 5.07.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Contract</FONT></U><FONT face=serif size=2>&#148; means any note, bond, mortgage, indenture, contract, agreement, permit,
license, real property lease, equipment and other personal property lease,
purchase order, sales order, arrangement or other commitment, obligation or
understanding, written or oral, to which a Person is a party or by which a
Person or its assets or properties are bound.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Customer Contracts</FONT></U><FONT face=serif size=2>&#148; has the meaning
assigned to that term in Section 1.06(a).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Distributor Contracts</FONT></U><FONT face=serif size=2>&#148; has the meaning
assigned to that term in Section 1.06(a).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>EBITDA</FONT></U><FONT face=serif size=2>&#148; means for any period, without duplication, the total of the following
for such Person, each calculated for such period (on a consolidated basis): net
income, plus interest expense, plus taxes, plus depreciation and amortization in
each case as determined in accordance with GAAP, consistently applied in
accordance with Seller&#146;s past practices. An example of the calculation of EBITDA
is attached hereto as </FONT><U><FONT face=serif size=2>Schedule
3.04(b)</FONT></U><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Environmental
Condition</FONT></U><FONT face=serif size=2>&#148; means any violations,
non-compliance or non-conformance with a Mexican Environmental Law.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Equipment</FONT></U><FONT face=serif size=2>&#148; means all fixed assets, machinery, equipment that are part of the
Tangible Personal Property.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Escrow Agreement</FONT></U><FONT face=serif size=2>&#148; means an escrow agreement, substantially in the form of
</FONT><U><FONT face=serif size=2>Exhibit D</FONT></U><FONT face=serif size=2>
hereto, being delivered simultaneously herewith between Seller, Buyer and the
escrow agent (the &#147;</FONT><U><FONT face=serif size=2>Escrow
Agent</FONT></U><FONT face=serif size=2>&#148;).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Escrow Amount</FONT></U><FONT face=serif size=2>&#148; has the meaning
assigned to that term in Section 1.04(b).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Excluded Assets</FONT></U><FONT face=serif size=2>&#148; has the meaning
assigned to that term in Section 1.01(b).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>GAAP</FONT></U><FONT face=serif size=2>&#148; means generally accepted
accounting principles of the United States.</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Governmental Authority</FONT></U><FONT face=serif size=2>&#148; means any federal, state, local or foreign government or any
subdivision, agency, instrumentality, authority, department, commission, board
or bureau thereof or any federal, state, local or foreign court, tribunal,
arbitrator or registrar.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Indemnified Party</FONT></U><FONT face=serif size=2>&#148; and &#147;</FONT><U><FONT face=serif size=2>Indemnifying
Party</FONT></U><FONT face=serif size=2>&#148; have the meanings assigned to those
terms in Section 6.03(a).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Intellectual Property</FONT></U><FONT face=serif size=2>&#148; means any and all present and future right, title and
interest anywhere in the world in and to (a) patents, design patents, invention
certificates, industrial designs, and utility models; (b) copyrights, mask
works, and other rights of authorship in any form or media (including computer
software and source codes); (c) trademarks, service marks, trade names, trade
dress and all goodwill related to the foregoing; (d) applications,
registrations, continuations, continuations-in-part, divisionals,
reexaminations, reissues, certifications, renewals, extensions and validations
of or for any of the foregoing; (e) inventions, discoveries and improvements and
trade secrets, related documentation and all intellectual property rights in the
foregoing; (f) rights to sue for any remedies for past, present or future
violation, misappropriation, or infringement of any of the foregoing; and (g)
rights of priority and protection of interests in any of the foregoing under the
laws of any jurisdiction.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Interim Financial Statements</FONT></U><FONT face=serif size=2>&#148; has the
meaning assigned to that term in Section 3.04.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Internal Revenue Code</FONT></U><FONT face=serif size=2>&#148; means the
Internal Revenue Code of 1986, as amended.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Inventory</FONT></U><FONT face=serif size=2>&#148; means finished goods inventory of wet tantalum capacitors owned by
Seller wherever located, including but not limited to in Matamoros, Mexico and
Victoria, Mexico, and all raw materials, components and supplies (except for
maintenance and process consumables) and work-in-progress owned by Seller
wherever located, including but not limited to in Matamoros, Mexico and
Victoria, Mexico, to the extent designated by Seller to make wet tantalum
capacitors including, without limitation, the Inventory listed in
</FONT><U><FONT face=serif size=2>Schedule 1.01(a)(ii)</FONT></U><FONT face=serif size=2> provided that the Inventory listed in </FONT><U><FONT face=serif size=2>Schedule 1.01(a)(ii)</FONT></U><FONT face=serif size=2> shall
be subject to adjustment on account of any changes to such Inventory due to the
operation of the Business by Seller in the ordinary course with the consent, and
in accordance with the instructions of, Buyer on or after Monday, September 15,
2008.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Knowledge</FONT></U><FONT face=serif size=2>&#148; when used with respect to Seller means the actual knowledge of the
persons identified on </FONT><U><FONT face=serif size=2>Schedule
1.01</FONT></U><FONT face=serif size=2> who have direct responsibility for the
Business of Seller.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Laws</FONT></U><FONT face=serif size=2>&#148; shall mean all federal, state, local or foreign laws, orders, writs,
injunctions, decrees, ordinances, awards, stipulations, statutes, judicial or
administrative doctrines, rules or regulations enacted, promulgated, issued or
entered by a Governmental Authority.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Liabilities</FONT></U><FONT face=serif size=2>&#148; means any and all debts, liabilities, losses, claims (including claims
based on arrangements for guaranteed sales), damages, costs, expenses and
obligations, whether fixed or contingent, or mature or unmatured, including,
without limitation, those arising under any law, rule, regulation, order or
consent decree of any governmental entity or any award of any arbitrator of any
kind, and those arising under any Contract, commitment, undertaking or
Action.</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Liens</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to
that term in Section 3.05.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Losses</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to
that term in Section 6.02(a).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Material Adverse
Effect</FONT></U><FONT face=serif size=2>&#148; means any change or effect that,
taken as a whole, has been or would be reasonably expected to be materially
adverse to the business, assets (including intangible assets), condition
(financial or otherwise) or results of operations of the Business or the
Transferred Assets, whether or not covered by insurance, other than any event
arising out of or relating to (a) any changes in general economic, business,
regulatory or political conditions, including national or international
hostilities, acts of terror or acts of war, or changes therein; (b) any changes
in any applicable Law or Tax laws, rules, or regulations, or interpretations
thereof, or any changes in generally accepted accounting principles, or
interpretations thereof; (c) the execution of this Agreement or the announcement
or consummation of this Agreement or the transactions contemplated hereby; or
(d) compliance with the terms of or the taking of such action required or
contemplated by this Agreement or any Ancillary Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Mexican Environmental
Law</FONT></U><FONT face=serif size=2>&#148; means the General Law of the Ecological
Equilibrium and the Environmental Protection, its Regulations and the Applicable
Mexican Official Standards.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Non-Compete Period</FONT></U><FONT face=serif size=2>&#148; has the meaning
assigned to that term in Section 5.06.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Other Customer
Contracts</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to that
term in Section 1.06(a).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Permits</FONT></U><FONT face=serif size=2>&#148; means municipal, state, federal and foreign consents, orders, filings,
franchises, permits, licenses, agreements, waivers and
authorizations.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Permitted Liens</FONT></U><FONT face=serif size=2>&#148; has the meaning
assigned to that term in Section 3.05.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Person</FONT></U><FONT face=serif size=2>&#148; includes any individual, sole proprietorship, partnership, joint
venture, trust, incorporated organization, association, corporation,
institution, party, entity or governmental or regulatory authority.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Purchase Price</FONT></U><FONT face=serif size=2>&#148; has the meaning
assigned to that term in Section 1.04.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Receivables</FONT></U><FONT face=serif size=2>&#148; means trade accounts receivable due to Seller arising from the sale of
Inventory sold from the Business in the ordinary course prior to the Closing
Date.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Retained Liabilities</FONT></U><FONT face=serif size=2>&#148; has the meaning
assigned to that term in Section 1.03.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Seller Indemnified
Parties</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to that
term in Section 6.02(b).</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Seller Indemnifying
Parties</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to that
term in Section 6.03(a).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Seller&#146;s Cap</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned
to that term in Section 6.04(b). </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Tangible Personal
Property</FONT></U><FONT face=serif size=2>&#148; means, wherever located, (i) all
manufacturing, production, maintenance, packaging and/or testing, machinery,
equipment (including tooling equipment), tools and spare parts owned by Seller
and used exclusively in the operation of the Business, including without
limitation the tangible assets listed on </FONT><U><FONT face=serif size=2>Schedule 1.01(a)(v)</FONT></U><FONT face=serif size=2> hereto, (ii)
without duplication, the Arco Tangible Assets; and (iii) the equipment listed on
</FONT><U><FONT face=serif size=2>Schedule 1.01(a)(v)</FONT></U><FONT face=serif size=2> hereto that is not used by Seller exclusively in the operation of the
Business. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Tax</FONT></U><FONT face=serif size=2>&#148; means any income, gross receipts, transfer, gains, sales, use,
employment, franchise, profits, property or other taxes, fees, stamp taxes and
duties, all federal, state and local Mexican taxes, estimated taxes, including
but not limited to, value added taxes, employment and payroll related taxes, add
valorem taxes, property taxes and import/export taxes, assessments or charges of
any kind whatsoever (whether payable directly or by withholding), together with
any interest and any penalties, additions to tax or additional amounts imposed
by any taxing authority with respect thereto. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Trademark License
Agreement</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to that
term in Section 1.01(c).</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Transferred Agreements</FONT></U><FONT face=serif size=2>&#148; has the
meaning assigned to that term in Section 1.06(b). </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Transferred Assets</FONT></U><FONT face=serif size=2>&#148; has the meaning
assigned to that term in Section 1.01. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Transferred Intellectual
Property</FONT></U><FONT face=serif size=2>&#148; has the meaning assigned to that
term in Section 1.01(a)(iv). </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Transition Services Agreement</FONT></U><FONT face=serif size=2>&#148; has the
meaning assigned to that term in the Recitals.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Vishay Intellectual Property</FONT></U><FONT face=serif size=2>&#148; has the
meaning assigned to that term in Section 5.08. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>exhibit10-1.htm
<DESCRIPTION>LOAN AGREEMENT DATED AS OF SEPTEMBER 15, 2008
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">


<P align=right><B><FONT face=serif size=2>Exhibit 10.1 </FONT></B></P>
<P align=center><FONT face=serif size=2>LOAN AGREEMENT </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>LOAN
AGREEMENT, dated as of September 15, 2008, between KEMET Electronics Corporation
and Vishay Intertechnology, Inc. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>WHEREAS,
Borrower desires to sell to Lender the assets, properties and rights related to
the Business as defined in the Asset Purchase Agreement, dated as of September
15, 2008 (as amended, restated, supplemented or otherwise modified from time to
time the &#147;</FONT><U><FONT face=serif size=2>Asset Purchase
Agreement</FONT></U><FONT face=serif size=2>&#148;), by and among Borrower, as
seller, and Lender, as buyer; </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>WHEREAS,
in connection with the Asset Purchase Agreement, Borrower has requested that
Lender make available a term loan facility; and </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>WHEREAS,
Lender is willing to make such term loan facility available upon and subject to
the terms and conditions set forth herein; </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>NOW,
THEREFORE, in consideration of the premises and the agreements set forth herein,
the parties hereby agree as follows: </FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE I: </FONT></B><U><FONT face=serif size=2>DEFINITIONS</FONT></U><FONT face=serif size=2> </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
1.1. </FONT><U><FONT face=serif size=2>Defined Terms</FONT></U><FONT face=serif size=2>. As used in this Agreement, the following terms have the meanings
specified below: </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Account</FONT></U><FONT face=serif size=2>&#148; has the meaning set forth in
Section 9-102 of the UCC.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Account Debtor</FONT></U><FONT face=serif size=2>&#148; has the meaning set
forth in Section 9-102 of the UCC. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Affiliate</FONT></U><FONT face=serif size=2>&#148; means, as to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person or is a
director or officer of such Person. For purposes of this definition, the term
&#147;control&#148; (including the terms &#147;controlling,&#148; &#147;controlled by&#148; and &#147;under common
control with&#148;) of a Person means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting interests, by contract or
otherwise.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Arcotronics</FONT></U><FONT face=serif size=2>&#148; means Arcotronics America Inc., an Oregon corporation and a
wholly-owned Subsidiary of Parent. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Asset Purchase Agreement</FONT></U><FONT face=serif size=2>&#148; has the
meaning set forth in the recitals hereto. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Borrower</FONT></U><FONT face=serif size=2>&#148; means KEMET Electronics
Corporation, a Delaware corporation.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Business Day</FONT></U><FONT face=serif size=2>&#148; means a day other than a Saturday, Sunday or any day on
which commercial banks in New York, New York are authorized or required by law
to close; </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> that, when used in connection with the Loans when they are bearing
interest based on LIBOR, the term &#147;</FONT><U><FONT face=serif size=2>Business
Day</FONT></U><FONT face=serif size=2>&#148; shall also exclude any day on which
banks are not open for dealings in Dollar deposits in the London interbank
market. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Closing Date</FONT></U><FONT face=serif size=2>&#148; means the date on which the conditions specified in Section
4.1 are satisfied. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Collateral</FONT></U><FONT face=serif size=2>&#148; has the meaning set forth
in the Security Agreement. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Collateral Account</FONT></U><FONT face=serif size=2>&#148; means that certain deposit account number 751672 maintained
at Depositary Bank. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Collateral Certificate</FONT></U><FONT face=serif size=2>&#148; means a certificate executed by any of the chief financial
officer, chief executive officer, treasurer, or any vice president of Borrower
in the form attached hereto as </FONT><U><FONT face=serif size=2>Exhibit
A</FONT></U><FONT face=serif size=2>; </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> that Borrower shall not be
required to make any certifications to Lender or deliver to Lender any other
information or documents to the extent that Borrower reasonably believes that
making such certifications or the disclosure of such information or documents to
Lender is not consistent with, or is likely to violate, applicable competition
laws, </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> </FONT><U><FONT face=serif size=2>further</FONT></U><FONT face=serif size=2>, that if Lender reasonably determines that making such certifications or
the disclosure of such information or documents is necessary for Borrower to
comply with Section 5.8, Lender and Borrower shall engage a third-party
administrator to perform collateral monitoring services, and Borrower shall be
required to deliver such information to the administrator who shall not share
such information with Lender. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Commitment</FONT></U><FONT face=serif size=2>&#148; means $15,000,000; as such amount may be reduced from time to time
pursuant to the terms of this Agreement. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Control Agreement</FONT></U><FONT face=serif size=2>&#148; means the deposit account control agreement to be entered
into among Borrower, Lender and Depositary Bank with respect to the Collateral
Account in form and substance reasonably satisfactory to Lender. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Credit Documents</FONT></U><FONT face=serif size=2>&#148; means this Agreement, the Security Agreement, each
Collateral Certificate and the Control Agreement. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Default</FONT></U><FONT face=serif size=2>&#148; means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Depositary Bank</FONT></U><FONT face=serif size=2>&#148; shall mean Wachovia
Bank, National Association.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Dollars</FONT></U><FONT face=serif size=2>&#148; or &#147;</FONT><U><FONT face=serif size=2>$</FONT></U><FONT face=serif size=2>&#148; means the lawful money
of the United States of America. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Domestic Receivables</FONT></U><FONT face=serif size=2>&#148; means any sale represented by an Account for which the
address of the Account Debtor on the invoice evidencing such Account is located
inside the United States of America. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Event of Default</FONT></U><FONT face=serif size=2>&#148; has the meaning set
forth in Article VI. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>
&#147;</FONT><U><FONT face=serif size=2>Facility Agreement</FONT></U><FONT face=serif size=2>&#148; means the Senior Facility Agreement with UniCredit Banca d&#146;Impresa
S.p.A. dated as of October 12, 2007, as amended, restated or otherwise modified
prior to the date hereof.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>FEC</FONT></U><FONT face=serif size=2>&#148; means The Forest Electric Company, an Illinois corporation and
wholly-owned Subsidiary of Parent. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Foreign Receivables</FONT></U><FONT face=serif size=2>&#148; means any sale represented by an Account for which the
address of the Account Debtor on the invoice evidencing such Account is located
outside the United States. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>GAAP</FONT></U><FONT face=serif size=2>&#148; means generally accepted accounting principles in the United States of
America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments
of the accounting profession, that are applicable to the circumstances as of the
date of determination. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Governing Documents</FONT></U><FONT face=serif size=2>&#148; means, with respect to any person, (a) the articles of
incorporation or certificate of incorporation (or equivalent organizational
document) of such person, (b) the bylaws (or equivalent governing document) of
such person, and (c) any document setting forth the manner of election and
duties of the directors or managing members of such Person (if any) and the
designation, amount or relative rights, limitations and preferences of any class
or series of such Person&#146;s stock. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Governmental Authority</FONT></U><FONT face=serif size=2>&#148; means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Indebtedness</FONT></U><FONT face=serif size=2>&#148; of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to loans or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services, (e) all Indebtedness of others
secured by any Lien on property owned or acquired by such Person, whether or not
the Indebtedness secured thereby has been assumed (</FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> that the amount of any
Indebtedness under this clause (e) secured by any Lien on any particular
property shall be limited to the lesser of the fair market value of such
property and the amount of all Indebtedness of others secured by Liens on such
property), (f) all guarantees by such Person of Indebtedness of others
(</FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2>
that the amount of any Indebtedness under this clause (f) subject to any
particular guarantee shall be limited to the lesser of such person&#146;s maximum
liability under any such guarantee and the amount of Indebtedness of others
guaranteed by such guarantee), (g) obligations that are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under generally accepted accounting principles in the United States of America,
(h) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and (i) all obligations, contingent or
otherwise, of such Person in respect of bankers&#146; acceptances. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person&#146;s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. The Indebtedness
of any Person shall not include current accounts payable incurred in the
ordinary course of business. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Indenture</FONT></U><FONT face=serif size=2>&#148; means that certain Indenture dated as of November 1, 2006, as amended,
restated, supplemented or otherwise modified from time to time in accordance
with its terms, between Parent and Wilmington Trust Company, a Delaware banking
corporation, as trustee, as amended, restated or otherwise modified prior to the
date hereof. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Interest Period</FONT></U><FONT face=serif size=2>&#148; means, initially, the period commencing on the Closing Date
for the Loan and thereafter on the last day of the immediately preceding
Interest Period, as the case may be, and ending on the numerically corresponding
day (or, if there is no numerically corresponding day, on the last day) in the
calendar month that is 12 months thereafter; </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> that any Interest Period
scheduled to end after the Maturity Date shall end on the Maturity Date;
</FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2>
</FONT><U><FONT face=serif size=2>further</FONT></U><FONT face=serif size=2>
that, with respect to any Interest Period commencing within the one month period
immediately preceding the Maturity Date, such Interest Period shall have the
duration selected by Lender in its sole discretion; </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> </FONT><U><FONT face=serif size=2>further</FONT></U><FONT face=serif size=2>, that, with respect to any Interest Period commencing on or after the Maturity
Date, such Interest Period shall have a one month duration. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Lender</FONT></U><FONT face=serif size=2>&#148; means Vishay Intertechnology,
Inc. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>LIBOR</FONT></U><FONT face=serif size=2>&#148; means with respect to any Interest Period, the rate as determined by
Lender on the basis of the offered rates for deposits in Dollars for a period
coextensive with that Interest Period which appears on www.bba.org.uk (or, if no
longer available, such other industry standard website for determining LIBOR),
on the day that is two Business Days preceding the first day of that Interest
Period.</FONT><I><FONT face=serif size=2> </FONT></I></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Lien</FONT></U><FONT face=serif size=2>&#148; means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Loan</FONT></U><FONT face=serif size=2>&#148; has the meaning set forth in
Section 2.1. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Margin</FONT></U><FONT face=serif size=2>&#148; means 4.0% per annum.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Material Agreements</FONT></U><FONT face=serif size=2>&#148; means (a) the Indenture, (b) the Facility Agreement and (c)
the Note Purchase Agreement.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Maturity Date</FONT></U><FONT face=serif size=2>&#148; means the earlier of (a) September 15, 2011 and (b) the date
on which the Loans shall become due and payable in accordance with the terms of
this Agreement, whether by acceleration or otherwise.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Note Purchase
Agreement</FONT></U><FONT face=serif size=2>&#148; means that certain Note Purchase
Agreement dated as of May 1, 1998 between Parent and the Note Purchasers party
thereto from time to time, as amended, restated or otherwise modified prior to
the date hereof. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Obligations</FONT></U><FONT face=serif size=2>&#148; means any now existing or hereafter arising obligations of Borrower to
Lender, whether primary or secondary, direct or indirect, absolute or
contingent, joint or several, secured or unsecured, due or not, liquidated or
unliquidated, arising by operation of law or otherwise under any Credit Document
whether for principal, interest, fees, expenses or otherwise, together with all
costs of collection or enforcement, including, without limitation, reasonable
attorneys&#146; fees incurred in any collection efforts or in any action or
proceeding. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>Parent</FONT></U><FONT face=serif size=2>&#148; means KEMET Corporation, a
Delaware corporation. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Person</FONT></U><FONT face=serif size=2>&#148; means any natural person, corporation, limited liability company,
limited partnership, trust, joint venture, association, company, partnership,
Governmental Authority or other entity. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Pledged Account</FONT></U><FONT face=serif size=2>&#148; means each US Pledged Account and each Foreign Receivable of
the Borrower from time to time pledged to Lender. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Security Agreement</FONT></U><FONT face=serif size=2>&#148; means the Pledge and Security Agreement, dated as of the
date hereof, executed by Borrower in favor of Lender. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Subsidiary</FONT></U><FONT face=serif size=2>&#148; means, as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to a
&#147;Subsidiary&#148; or to &#147;Subsidiaries&#148; in this Agreement shall refer to a Subsidiary
or Subsidiaries of Borrower. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>Transactions</FONT></U><FONT face=serif size=2>&#148; means the execution, delivery, and performance by Borrower
of the Credit Documents, the borrowing and repayment of the Loans, the pledge,
assignments or grant of the security interests in the Collateral pursuant to the
Credit Documents, the payment of interest and fees thereunder and the use of the
proceeds of the Loans. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;</FONT><U><FONT face=serif size=2>UCC</FONT></U><FONT face=serif size=2>&#148; means the Uniform Commercial Code as in effect from time to time in the
State of New York. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&#147;</FONT><U><FONT face=serif size=2>US Pledged Account</FONT></U><FONT face=serif size=2>&#148; means each
Domestic Receivable of the Borrower.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
1.2. </FONT><U><FONT face=serif size=2>Terms Generally</FONT></U><FONT face=serif size=2>. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words &#147;include,&#148; &#147;includes,&#148; and &#147;including&#148; shall be deemed
to be followed by the phrase &#147;without limitation.&#148; The word &#147;will&#148; shall be
construed to have the same meaning and effect as the word &#147;shall.&#148; Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person&#146;s successors and
assigns, (c) the words &#147;herein,&#148; &#147;hereof,&#148; and &#147;hereunder,&#148; and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, and Schedules shall be construed to refer to Articles and Sections of,
and Schedules to, this Agreement and (e) the words &#147;asset&#148; and &#147;property&#148; shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and general intangibles.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
1.3. </FONT><U><FONT face=serif size=2>Specified Times and Dates;
Determinations</FONT></U><FONT face=serif size=2>. All times specified in this
Agreement shall be determined, unless stated specifically herein to the
contrary, on the basis of the prevailing time in New York City. Unless stated
specifically herein to the contrary, if any day or date specified in this
Agreement for any notice, action or event is not a Business Day, then the due
date for such notice, action or event shall be extended to the immediately
succeeding Business Day; </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> that interest shall accrue on
any payments due by Borrower which are extended by the operation of this Section
1.3. Any determination by Lender hereunder shall, in the absence of manifest
error, be conclusive and binding.</FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE II: </FONT></B><U><FONT face=serif size=2>THE LOAN</FONT></U><FONT face=serif size=2> </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
2.1. </FONT><U><FONT face=serif size=2>Term Loan</FONT></U><FONT face=serif size=2>. Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, Lender hereby agrees to lend to
Borrower in a single draw on the Closing Date the total amount of the Commitment
(the &#147;</FONT><U><FONT face=serif size=2>Loan</FONT></U><FONT face=serif size=2>&#148;). Borrower shall repay the entire outstanding principal balance of the
Loan on the Maturity Date. Amounts repaid shall not be re-borrowed. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Section 2.2. </FONT><U><FONT face=serif size=2>Interest</FONT></U><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Loans</FONT></U><FONT face=serif size=2>. The Loan shall bear interest on
the unpaid principal amount thereof from the Closing Date until payment in full
thereof. Interest shall be payable (i) monthly, on the first Business Day of
each month, (ii) on the date of each prepayment (on the principal amount
prepaid), and (iii) on the Maturity Date.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Interest Rate</FONT></U><FONT face=serif size=2>. The interest rate for
the Loan shall be equal to LIBOR for such Interest Period plus the Margin.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Default Interest</FONT></U><FONT face=serif size=2>. After the occurrence
and during the continuance of an Event of Default, to the extent permitted by
applicable law, Borrower shall pay on demand, on the principal amount of the
outstanding Loans, the otherwise applicable interest rate plus 2% per annum.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Maximum Interest Rate</FONT></U><FONT face=serif size=2>. Notwithstanding
anything in any Credit Document to the contrary, in no event shall the interest
charged under any Credit Document exceed the maximum rate of interest permitted
under applicable law. Any payment made which if treated as interest would cause
the interest charged to exceed the maximum rate permitted shall instead be held
by Lender to the extent of such excess as additional Collateral hereunder and
applied to future interest payments as and when such amount becomes due and
payable hereunder. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(e)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Calculations</FONT></U><FONT face=serif size=2>. Interest shall be
calculated on the basis of a year of 360 days for the actual days elapsed.
Interest is calculated based on LIBOR for the applicable Interest Period but
shall be payable on the first Business Day of each month. Each determination by
Lender of a rate of interest hereunder shall be conclusive and binding for all
purposes, absent manifest error. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
2.3. </FONT><U><FONT face=serif size=2>Optional Prepayment of
Loans</FONT></U><FONT face=serif size=2>. Borrower shall have the right on not
less than four Business Days prior written notice to Lender to prepay the Loan
at any time in whole or in part; </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> that such any prepayment
shall be in a minimum amount of not less than the lesser of (i) $150,000 or (ii)
the aggregate amount outstanding with respect to the Obligations at such
time.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
2.4. </FONT><U><FONT face=serif size=2>Payments</FONT></U><FONT face=serif size=2>. All payments by Borrower shall be payable on the due date thereof, in
immediately available funds in Dollars, without any setoff, counterclaim,
withholding or deduction of any kind. All payments shall be applied by Lender as
follows: first, to the payment of all accrued but unpaid fees, costs or expenses
under the Credit Documents; second, to the payment of all accrued but unpaid
interest under the Credit Documents; third, to the repayment of then outstanding
principal amount of the Loan; and fourth, the balance, if any, to Borrower.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
2.5. </FONT><U><FONT face=serif size=2>Obligations Secured</FONT></U><FONT face=serif size=2>. The Obligations of Borrower under the Credit Documents shall
be secured as more fully described in the Security Agreement. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
2.6. </FONT><U><FONT face=serif size=2>Taxes</FONT></U><FONT face=serif size=2>.
(a) Any and all payments made by Borrower hereunder shall be made free and clear
of and without deduction for any present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect thereto
to the extent attributable to the Loans or the Collateral, excluding (i) taxes
imposed on net income and (ii) all income and franchise taxes of the United
States of America, any political subdivisions thereof, and any state of the
United States of America, and any political subdivisions thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as &#147;</FONT><U><FONT face=serif size=2>Taxes</FONT></U><FONT face=serif size=2>&#148;). (b) If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.6) Lender shall receive an amount
equal to the </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law. (c) Borrower shall pay and
hereby indemnifies Lender from any documentary stamp Taxes in connection with
the execution or delivery of any Credit Document. Within 30 days after the date
of any payment of Taxes, Borrower will furnish Lender with evidence of payment
thereof. Borrower hereby indemnifies Lender for the full amount of Taxes
(including, without limitation, any Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted. Payment pursuant
to this indemnification obligation shall be made upon written demand therefor.
The obligations of Borrower under this Section 2.6 shall survive the termination
of this Agreement.</FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE III: </FONT></B><U><FONT face=serif size=2>REPRESENTATIONS AND WARRANTIES</FONT></U><FONT face=serif size=2> </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Borrower represents and warrants to
Lender on the date of the making of the Loan that: </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
3.1. </FONT><U><FONT face=serif size=2>Organization and
Authorization</FONT></U><FONT face=serif size=2>. (a) Borrower is duly organized
or formed, validly existing and in good standing (if and to the extent
applicable) under the laws of the jurisdiction of its organization or formation,
has all requisite power and authority to carry on its business as now conducted
and (b) the Transactions are within the powers of Borrower and have been duly
authorized by all necessary action for Borrower. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
3.2. </FONT><U><FONT face=serif size=2>Enforceability</FONT></U><FONT face=serif size=2>. Each Credit Document to which it is a party has been duly executed and
delivered by Borrower and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors&#146; rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law;</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
3.3. </FONT><U><FONT face=serif size=2>No Consents, No Conflicts</FONT></U><FONT face=serif size=2>. The Transactions (a) will not violate any applicable law or
regulation or the charter, by-laws, trust agreement or other organizational
documents of any Borrower or any order of any Governmental Authority binding on
any Borrower, (b) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Borrower, including, without
limitation, any Material Agreement, or any of its assets, or give rise to a
right thereunder to require any payment to be made by any Borrower, and (c) will
not result in the creation or imposition of any Lien on any asset of any
Borrower other than pursuant to the Credit Documents.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
3.4. </FONT><U><FONT face=serif size=2>Domestic Receivables</FONT></U><FONT face=serif size=2>. As of the date hereof, neither Parent nor any Subsidiary of
Parent (other than Borrower, Arcotronics and FEC) generates Domestic
Receivables. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Section 3.5. </FONT><U><FONT face=serif size=2>No Default</FONT></U><FONT face=serif size=2>. No Default has
occurred and is continuing. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
3.6. </FONT><U><FONT face=serif size=2>Investment Company Status</FONT></U><FONT face=serif size=2>. Borrower is not an &#147;investment company&#148; as defined in, or
subject to regulation under, the Investment Company Act of 1940. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
3.7. </FONT><U><FONT face=serif size=2>Security Interests; Certain
Information</FONT></U><FONT face=serif size=2>. Lender has a valid and perfected
first priority Lien on all of the Collateral and all filings and other actions
necessary for the perfection and first priority status of such Liens have been
duly made or taken and remain in full force and effect. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
3.8. </FONT><U><FONT face=serif size=2>Indebtedness Agreements</FONT></U><FONT face=serif size=2>. As of the Closing Date, Borrower is not party to any
agreements for borrowed money in an aggregate principal amount in excess of
$5,000,000 other than the Material Agreements.</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
3.9. </FONT><U><FONT face=serif size=2>Disclosures</FONT></U><FONT face=serif size=2>. All material information provided in each Collateral Certificate and on
Schedule I to the Security Agreement is true, correct and complete in all
material respects and does not contain any material misstatement or omit to
state a material fact. </FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE IV: </FONT></B><U><FONT face=serif size=2>CONDITIONS</FONT></U><FONT face=serif size=2> </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
4.1. </FONT><U><FONT face=serif size=2>Closing Date</FONT></U><FONT face=serif size=2>. The obligations of Lender to make the Loan to Borrower hereunder shall
not become effective until each of the following conditions is satisfied:
</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Lender shall have received the following
documents: </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(i)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>a counterpart of this
Agreement executed by Borrower;</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(ii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>the Security Agreement
executed by Borrower; and</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>a certificate of a responsible officer of Borrower certifying as to (A)
its Governing Documents as in existence on the Closing Date, (B) the resolution
of Borrower&#146;s board of directors approving and authorizing the execution,
delivery and performance of this Agreement and the Credit Documents, and (C) the
names and true signatures of each officer of Borrower that has been authorized
to execute any document required hereunder. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Lender shall have received a duly
executed Collateral Certificate. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Lender shall have received Lien searches against Borrower indicating that
there are no Liens against the Collateral. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Lender shall have received an opinion of counsel to Borrower in form and
substance reasonably satisfactory to Lender addressing such matters as Lender
shall reasonably request (including a &#147;no conflict&#148; opinion in form to be
agreed). </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(e)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>The representations and warranties set forth in Article III hereof and in
any documents delivered herewith, shall be true and correct as of the date of
the making of the Loan, except to the extent they expressly refer to an earlier
date, in which case they shall have been true and correct as of such earlier
date. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(f)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Lender shall be satisfied that all necessary consents and approvals with
respect to the Transactions shall have been obtained and shall be satisfactory
to Lender. </FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE V: </FONT></B><U><FONT face=serif size=2>COVENANTS</FONT></U><FONT face=serif size=2> </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Until the
principal of and interest on the Loan and all fees and other Obligations (other
than unasserted contingent indemnification obligations, including those arising
under Section 2.6) payable by Borrower under the Credit Documents shall have
been paid in full, Borrower covenants and agrees with Lender that: </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.1. </FONT><U><FONT face=serif size=2>Collateral Certificate</FONT></U><FONT face=serif size=2>. On the fourth Business Day of each month, Borrower shall
deliver to Lender a duly executed Collateral Certificate. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.2. </FONT><U><FONT face=serif size=2>Notices</FONT></U><FONT face=serif size=2>. Borrower will furnish to Lender prompt written notice of the occurrence
of any Default. Each notice delivered under this Section shall be accompanied by
a statement of Borrower setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.3. </FONT><U><FONT face=serif size=2>Books and Records</FONT></U><FONT face=serif size=2>. Borrower will keep proper books of record and account in
which full, true and correct entries, in all material respects, are made of all
dealings and transactions in relation to the Collateral.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.4. </FONT><U><FONT face=serif size=2>Existence</FONT></U><FONT face=serif size=2>. Borrower will do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges and franchises material to the conduct of its
business.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.5. </FONT><U><FONT face=serif size=2>Use of Proceeds</FONT></U><FONT face=serif size=2>. The proceeds of the Loan and the sale of the Business
pursuant to the Asset Purchase Agreement shall be used by Borrower to repay in
full any existing Indebtedness under the Note Purchase Agreement. No part of the
proceeds of the Loan will be used directly or indirectly for the purpose of
purchasing or carrying margin stock within the meaning of Regulations T, U, or X
of the Federal Reserve Board.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.6. </FONT><U><FONT face=serif size=2>Liens</FONT></U><FONT face=serif size=2>.
Borrower shall not permit any Liens to exist on the Collateral except Liens
created pursuant to the Credit Documents. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.7. </FONT><U><FONT face=serif size=2>Domestic Receivables</FONT></U><FONT face=serif size=2>. If, at any time after the date hereof, any Domestic
Receivables are to be generated by Parent or any Subsidiary of Parent (other
than Borrower, Arcotronics and FEC), then Parent and Borrower shall make prior
arrangements with Lender to ensure that any and all such Domestic Receivables
are pledged to Lender on terms and conditions substantially similar to those in
the Security Agreement; </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> that (a) Arcotronics shall
only generate Domestic Receivables in connection with its existing customers and
existing products in the film and electrolytic capacitors business consistent
with its past practices and (b) FEC shall only generate Domestic Receivables in
connection with its existing magnetics business. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.8. </FONT><U><FONT face=serif size=2>Foreign Receivables</FONT></U><FONT face=serif size=2>. Beginning no later than 90 days after the Closing Date,
Borrower shall pledge, or cause to be pledged, Foreign Receivables to Lender
pursuant to security documents reasonably acceptable to Lender (it being
understood that Borrower shall use its commercially reasonable best efforts to
provide Lender with such pledge on terms and conditions as similar to the terms
and conditions of the Security Agreement as possible under the circumstances)
having a value for GAAP purposes (net of any allowances for doubtful accounts)
at all times of not less than $13,000,000. For the avoidance of doubt, Foreign
Receivables pledged to Lender pursuant to this Section shall not be subject to
any Liens except Liens in favor of Lender. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.9. </FONT><U><FONT face=serif size=2>Further Assurances</FONT></U><FONT face=serif size=2>. Borrower shall upon request by Lender (a) promptly correct
any material defect or error that may be discovered in any Credit Document or in
the execution, acknowledgement or recordation thereof and (b) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and re-register
any and all such further acts, deeds, conveyances, security agreements, pledge
agreements, mortgages, deeds of trust, trust deeds, assignments, estoppel
certificates, financing statements and continuation thereof, termination
statements, notices of assignment, transfers, certificates, assurances and other
instruments as Lender may reasonably require from time to time in order to (i)
subject to the Liens and security interests created by any of the Credit
Documents any of Borrower&#146;s properties, rights or interests covered or now or
hereafter intended to be covered by any of the Credit Documents, (ii) perfect
and maintain the validity, effectiveness and priority of any of the Credit
Documents and the Liens and security interests intended to be created thereby
and (iii) better assure, convey, grant, assign, transfer, preserve, protect and
confirm unto Lender the rights granted or now or hereafter intended to be
granted to Lender under any Credit Document. Lender shall upon request by Borrower promptly correct any material defect or error that
may be discovered in any Credit Document or in the execution, acknowledgement or
recordation thereof. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.10. <u>No Information to Lender</u>. At no time will Borrower be required to share
any information about Borrower or the Collateral with Lender other than as
expressly required in the Credit Documents, nor will Lender have any right to
request any such information from Borrower. In addition, Borrower shall not be
required to make any certifications to Lender or deliver to Lender any other
information or documents to the extent that Borrower reasonably believes that
making such certifications or the disclosure of such information or documents to
Lender is not consistent with, or is likely to violate, applicable competition
laws, </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2>, that if Lender reasonably determines that making such certifications or
the disclosure of such information or documents is necessary for Borrower to
comply with any Credit Document, Lender and Borrower shall engage a third-party
administrator to perform collateral monitoring services, and Borrower shall be
required to deliver such information to the administrator who shall not share
such information with Lender.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
5.11. </FONT><U><FONT face=serif size=2>Post-Closing</FONT></U><FONT face=serif size=2>. Within 3 days from the Closing Date, Borrower (i) shall enter into, and
cause the Depositary Bank to enter into, the Control Agreement and (ii) shall
cause special legal counsel to Borrower to provide a legal opinion to Lender in
form and substance reasonably satisfactory to Lender as to the perfection of
Lender's security interest in the Collateral Account. </FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE VI: </FONT></B><U><FONT face=serif size=2>EVENTS OF DEFAULT</FONT></U><FONT face=serif size=2>
</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Section 6.1. If any of the following
events (&#147;</FONT><U><FONT face=serif size=2>Events of Default</FONT></U><FONT face=serif size=2>&#148;) shall occur: </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Borrower shall fail to pay any principal of the Loan when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise; </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Borrower shall fail to pay any interest on the Loan, on any fee under any
of the Credit Documents, or on any other Obligation (other than the one referred
to in clause (a) above) and such non-payment shall continue for a period of five
(5) Business Days after the due date thereof; </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Borrower shall fail to pay any fee or any other amount (other than an
amount referred to in clause (a) or (b) of this Section 6.1) payable under any
Credit Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of thirty (30) days after the
receipt of written notice of the date on which the same shall become due and
payable (it being understood that invoices by Lender to Borrower shall
constitute such written notice); </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>any representation or warranty made or deemed made by or on behalf of
Borrower in connection with any Credit Document or any amendment or modification
thereof, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Credit Document or any amendment
or modification hereof shall prove to have been incorrect in any material
respect when made or deemed made and shall continue to be incorrect for a period
of ten (10) Business Days thereafter; </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(e)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.11 or Section 3(b)(i)(A) of the Security
Agreement; </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(f)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Borrower shall fail to observe or perform (i) any covenant, condition or
agreement contained in Section 5.1 or 5.7 or Sections (b)(i)(B) and 3(b)(ii) of
the Security Agreement and such failure shall continue unremedied for a period
of five (5) Business Days or (ii) any covenant, </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>condition or agreement contained in
Sections 5.6 or 5.8 or Sections 3(c) or 3(d) of the Security Agreement and such
failure shall continue unremedied for a period of ten (10) Business Days or
(iii) any other covenant, condition or agreement contained in any Credit
Document and such failure shall continue unremedied for a period of thirty (30)
days after notice thereof from Lender to Borrower; </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(g)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>an
involuntary proceeding shall be commenced or an involuntary petition (other than
by Lender) shall be filed seeking (i) liquidation, reorganization or other
relief in respect of Borrower or any Subsidiary or its debts, or of a
substantial part of their assets, under any federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Borrower or any Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for forty-five (45) days or an order or
decree approving or ordering any of the foregoing shall be entered; </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(h)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Borrower or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (g) of this Section 6.1, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for Borrower or any Subsidiary or for a substantial part of their assets, (iv)
file an answer admitting the material allegations of a petition filed against
them in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing; or </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(i)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>any material provision of any Credit Document shall, for any reason,
cease to be valid and binding on Borrower, or Borrower shall so state in
writing; or any Credit Document shall, for any reason, cease to create a valid
Lien on any of the Collateral purported to be covered thereby or any Lien
granted to Lender shall cease to be a perfected first priority Lien, or Borrower
shall so state in writing; </FONT></P>
<P align=justify><FONT face=serif size=2>then, and in every such event (other
than an event with respect to Borrower described in clause (g) or (h) of this
Section 6.1), and at any time thereafter during the continuance of such event,
Lender may by notice to Borrower declare the Loans then outstanding to be due
and payable in whole (or in part, in which case any principal not so declared to
be due and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other Obligations of Borrower
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by Borrower; and in case of any event with respect to Borrower
described in clause (g) or (h) of this Section 6.1, the principal of the Loans
then outstanding, together with accrued interest thereon and all fees and other
Obligations of Borrower accrued hereunder, shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by Borrower. In addition, Lender may exercise any
remedies provided for by the Credit Documents in accordance with the terms
thereof or any other remedies provided by applicable law. </FONT></P>
<P align=center><B><FONT face=serif size=2>ARTICLE VII: </FONT></B><U><FONT face=serif size=2>MISCELLANEOUS</FONT></U><FONT face=serif size=2> </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
7.1. </FONT><U><FONT face=serif size=2>Notices</FONT></U><FONT face=serif size=2>. All notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
U.S. mail or sent by telecopy (with confirmed receipt or followed by overnight
delivery) to the addresses (or telecopy numbers) set forth on the signature
pages hereof. Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be deemed
to have been given on the date of receipt or, if mailed, the fifth Business Day
following the date so mailed, if earlier. Telecopied notices shall be deemed to
have been given on the day of receipt if received on a Business Day before 11:00
am (New York time), and otherwise, on the succeeding Business Day.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
7.2. </FONT><U><FONT face=serif size=2>Amendment and Waiver</FONT></U><FONT face=serif size=2>. No alteration, modification, amendment or waiver of any
terms and conditions of any of the Credit Documents shall be effective or
enforceable against Lender unless set forth in a writing signed by Lender.
Without limiting the generality of the foregoing, the making of each Loan shall
not be construed as a waiver of any Default, regardless of whether Lender may
have had notice or knowledge of such Default at the time. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
7.3. </FONT><U><FONT face=serif size=2>Non-Recourse Obligations</FONT></U><FONT face=serif size=2>. The Credit Documents shall be non-recourse to Borrower;
except that they will be full recourse to Borrower if any of the following
events occur: (a) the Borrower commits intentional fraud (including, without
limitation, any intentional action by Borrower or any Affiliate of Borrower
designed to circumvent the collateral support for this Loan in any material
respect) or makes an intentional material misrepresentation in any Credit
Document, including any Collateral Certificate; (b) the occurrence of any event
described in Section 6.1(g) or (h); (c) Borrower fails to comply with Section
5.11; or (d) the Obligations (other than unasserted contingent indemnification
obligations, including those arising under Section 2.6) are not paid in full on
or before September __, 2011; provided, however, that upon the occurrence of
such an event the Credit Documents will be full recourse only to the extent of
the deficiency created because of the Collateral&#146;s failure to cover the
Obligations then due and owing. For the avoidance of doubt, if after exercise of
remedies against the Collateral there exists any deficiency in the amount owing
to Lender under the Credit Documents, such deficiency shall not be discharged
but shall be recoverable against Borrower on a fully recourse basis from and
after the date the Credit Documents become recourse against Borrower under this
Section 7.3. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
7.4. </FONT><U><FONT face=serif size=2>Expenses</FONT></U><FONT face=serif size=2>. Borrower and Lender hereby agree that each party shall pay its own
expenses in connection with entering into this Agreement (including legal
expenses), </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> that Borrower shall not be responsible for any expenses in connection
with any legal opinion provided in connection with the pledge of Foreign
Receivables in Section 5.8. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
7.5. </FONT><U><FONT face=serif size=2>Successors and Assigns</FONT></U><FONT face=serif size=2>. The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that Borrower may not assign or otherwise transfer any of its
rights or Obligations hereunder without the prior written consent of Lender and
any attempted assignment or transfer by Borrower in contravention of the
foregoing shall be null and void and Lender may not assign or otherwise transfer
any of its rights or obligations hereunder other than an assignment or transfer
to a wholly-owned Subsidiary of Lender (it being understood that if an assignment
is made by Lender to a wholly-owned Subsidiary of Lender, and thereafter Lender
fails to own 100% of the equity interests of such Subsidiary, then such failure
shall constitute an assignment to Lender for purposes of this Section 7.5)
without the prior written consent of Borrower and any attempted assignment or
transfer by Lender in contravention of the foregoing shall be null and
void.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
7.6. </FONT><U><FONT face=serif size=2>Survival</FONT></U><FONT face=serif size=2>. All covenants, agreements, representations and warranties made by
Borrower in any Credit Document and in the certificates or other instruments
delivered in connection with or pursuant to any Credit Document shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of each Credit Document and the making of the
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at </FONT></P>
<HR align=center width="100%" noShade SIZE=2>



<PAGE>



<P align=justify><FONT face=serif size=2>the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on the Loans or any fee or any other amount payable
under any Credit Document is outstanding and unpaid.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
7.7. </FONT><U><FONT face=serif size=2>Severability</FONT></U><FONT face=serif size=2>. Any provision of any Credit Document held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
effecting the validity, legality and enforceability of the remaining provisions
thereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other
jurisdiction.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Section 7.8. </FONT><U><FONT face=serif size=2>Governing Law; Jurisdiction; Consent to Service of
Process</FONT></U><FONT face=serif size=2>.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR
STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT
AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS LOAN AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW
YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT
THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE
VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT ANY CREDIT DOCUMENT
OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AGREES NOT TO SEEK AND HEREBY
WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF
ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN
ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH ANY CREDIT
DOCUMENT. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 7.1. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
7.9. </FONT><U><FONT face=serif size=2>Headings</FONT></U><FONT face=serif size=2>. Article and Section headings used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
7.10. </FONT><U><FONT face=serif size=2>Counterparts</FONT></U><FONT face=serif size=2>. This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. Delivery of an executed counterpart of a signature page of this
Agreement or of any other Credit Document by facsimile or electronic
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement or of such other Credit Document. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Section
7.11. </FONT><U><FONT face=serif size=2>No Reliance</FONT></U><FONT face=serif size=2>. Borrower acknowledges that it is making its own independent decision to
enter into the transactions under the Credit Documents and has determined that
such transactions are appropriate and proper based upon its own judgment and
upon advice from such advisers as it has deemed necessary. Borrower acknowledges
that it is not relying on any communication (written or oral) from Lender as
investment or tax advice or as a recommendation to enter into such transactions
and specifically agrees and acknowledges that any information and explanation
relating to the terms and conditions of such transactions shall not be
considered investment or tax advice or a recommendation from Lender to enter
into such transactions. No communication (written or oral) from Lender regarding
such transactions shall be deemed to be an assurance or guarantee as to the
expected results, benefits, outcomes or characteristics (economic, tax or
otherwise) of such transactions. Borrower acknowledges that it is capable of
assessing the merits of and understands (on its own behalf or through
independent professional advice), and accepts, the terms, conditions and risks
of such transactions and that it is also capable of assuming and assumes the
risks of such transactions. Borrower acknowledges that Lender is not acting as a
fiduciary or an adviser to Borrower in respect of such transactions.</FONT></P>
<P align=center><FONT face=serif size=2>Remainder of Page Intentionally Left
Blank </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written. </FONT></P>
<DIV align=right>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=justify width="100%" colSpan=2><FONT face=serif size=2>BORROWER:</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="100%" colSpan=2><FONT face=serif size=2>KEMET ELECTRONICS CORPORATION</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="1%"></TD>
    <TD width="99%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #ffffff 1pt solid" noWrap align=justify width="1%"><FONT size=2>By</FONT>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=justify width="99%"><FONT face=serif size=2>/s/ Per-Olof Loof</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="1%"></TD>
    <TD noWrap align=justify width="99%"><FONT face=serif size=2>Name:&nbsp;
      Per-Olof Loof</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="1%"></TD>
    <TD noWrap align=justify width="99%"><FONT face=serif size=2>Title:&nbsp;&nbsp;&nbsp; CEO</FONT>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=justify width="1%"></TD>
    <TD noWrap align=justify width="99%">&nbsp;</TD></TR>
  <TR>
    <TD align=justify width="100%" colSpan=2>
      <P align=justify><I><U><FONT face=serif size=2>Notice
      Address</FONT></U></I><I><FONT face=serif size=2>:</FONT></I></P>
      <P align=justify><FONT face=serif size=2>KEMET Electronics
      Corporation<BR>c/o KEMET Corporation<BR>R. James ("Jamie") Assaf<BR>Vice
      President, General Counsel<BR>Phone: 954-766-2817<BR>Fax:
      954-766-2805<BR>www.kemet.com| JamieAssaf@kemet.com<BR>101 NE 3rd Ave.,
      Suite 1700, Fort Lauderdale,<BR>FL 33301
USA</FONT></P></TD></TR></TABLE></DIV><BR>
<HR align=center width="100%" noShade SIZE=2>
<PAGE><BR>
<DIV align=right>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=justify width="99%" colSpan=2><FONT face=serif size=2>LENDER</FONT><I><FONT face=serif size=2>:</FONT></I> </TD></TR>
  <TR>
    <TD width="99%" colSpan=2>&nbsp;&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="99%" colSpan=2><FONT face=serif size=2>VISHAY INTERTECHNOLOGY, INC.</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=2>&nbsp; &nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="1%"><FONT size=2>By</FONT><FONT size=3>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=justify width="98%"><FONT size=2><FONT face=serif>/s/ Steven
      Klausner</FONT></FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="1%"><FONT face=serif size=2></FONT></TD>
    <TD noWrap align=justify width="98%"><FONT face=serif size=2>Name:&nbsp;
      Steven Klausner</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="1%">&nbsp;</TD>
    <TD noWrap align=justify width="98%"><FONT face=serif size=2>Title:&nbsp;&nbsp;&nbsp; Vice President and Treasurer</FONT>&nbsp;
    </TD></TR>
  <TR>
    <TD noWrap align=justify width="1%"></TD>
    <TD noWrap align=justify width="98%">&nbsp;</TD></TR>
  <TR>
    <TD align=justify width="99%" colSpan=2>
      <P align=justify><U><I><FONT face=serif size=2>Notice
      Address</FONT></I><I><FONT face=serif size=2>: </FONT></I></U></P>
      <P align=justify><FONT face=serif size=2>Avner Z. Lahat<BR></FONT><FONT face=serif size=2>Director of Legal Services<BR>Vishay Intertechnology,
      Inc.<BR>63 Lancaster Avenue<BR>Malvern, PA 19355-2143<BR>Phone: (610)
      251-5286<BR>eFax: (484) 631-0831</FONT></P></TD></TR></TABLE></DIV><BR>
<HR align=center width="100%" noShade SIZE=2>




</BODY>

</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>exhibit10-2.htm
<DESCRIPTION>PLEDGE AND SECURITY AGREEMENT DATED AS OF SEPTEMBER 15, 2008
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">


<P align=right><FONT face=serif size=2>Exhibit 10.2 </FONT></P>
<P align=center><B><FONT face=serif size=2>PLEDGE AND SECURITY AGREEMENT
</FONT></B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>PLEDGE
AND SECURITY AGREEMENT, dated as of September 15, 2008 (as amended, supplemented
or modified from time to time, this &#147;</FONT><U><FONT face=serif size=2>Agreement</FONT></U><FONT face=serif size=2>&#148;), made by KEMET Electronics
Corporation (the &#147;</FONT><U><FONT face=serif size=2>Grantor</FONT></U><FONT face=serif size=2>&#148;) in favor of Vishay Intertechnology, Inc. (&#147;</FONT><U><FONT face=serif size=2>Secured Party</FONT></U><FONT face=serif size=2>&#148;).
</FONT></P>
<P align=center><B><FONT face=serif size=2>RECITALS </FONT></B></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Pursuant to the Loan Agreement dated
as of the date hereof (as amended, supplemented or modified from time to time,
the &#147;</FONT><U><FONT face=serif size=2>Loan Agreement</FONT></U><FONT face=serif size=2>&#148;; capitalized terms used but not defined herein shall have the meanings
given such terms in the Loan Agreement) by and among Kemet Electronics
Corporation, as Borrower, and Secured Party, Secured Party has agreed to make a
Loan to Borrower. In order to induce Secured Party to make the Loan, Grantor has
agreed to grant a continuing Lien on the Collateral to secure the Obligations
(as hereinafter defined). Accordingly, Grantor hereby agrees as follows:
</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>1.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Security Interest</FONT></U><FONT face=serif size=2>. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Collateral</FONT></U><FONT face=serif size=2>. For purposes of this
Agreement, all of the following property now owned or at any time hereafter
acquired by Grantor or in which Grantor now has or at any time in the future may
acquire any right, title or interest is collectively referred to as
&#147;</FONT><U><FONT face=serif size=2>Collateral</FONT></U><FONT face=serif size=2>&#148;: (i) US Pledged Accounts, (ii) all books and records relating to the US
Pledged Accounts, (ii) all Supporting Obligations (as defined in the UCC)
relating to the US Pledged Accounts, (iii) the Collateral Account and all
deposits therein, and (vi) to the extent not otherwise included, all Proceeds
(as defined in the UCC). </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Grant of Security</FONT></U><FONT face=serif size=2>. As security for the
Obligations (as hereinafter defined), Grantor hereby delivers, assigns, pledges,
sets over and grants to Secured Party a first priority security interest in, all
of its right, title and interest, whether now existing or hereafter arising or
acquired, in and to the Collateral, together with all substitutions and
replacements thereof and any products and proceeds thereof. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Security for Obligations</FONT></U><FONT face=serif size=2>. This
Agreement secures the payment of all now existing or hereafter arising
obligations of Grantor to Secured Party, whether primary or secondary, direct or
indirect, absolute or contingent, joint or several, secured or unsecured, due or
not, liquidated or unliquidated, arising by operation of law or otherwise under
the Loan Agreement or any other Credit Document but only to the extent required
under the Loan Agreement or any other Credit Document, whether for principal,
interest, fees, expenses or otherwise, together with all costs of collection or
enforcement, including, without limitation, reasonable attorneys&#146; fees incurred
in any collection efforts or in any action or proceeding (all such obligations
being the &#147;</FONT><U><FONT face=serif size=2>Obligations</FONT></U><FONT face=serif size=2>&#148;). </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Grantor Remains Liable</FONT></U><FONT face=serif size=2>. This Agreement
shall not affect Grantor&#146;s liability to perform all of its duties and
obligations under the transactions giving rise to the Obligations. The exercise
by Secured Party of any of the rights hereunder shall not release Grantor from
any of its duties or obligations under the transactions giving rise to the
Obligations, which shall remain unchanged as if this Agreement had not been
executed. Secured Party shall not have any obligation or liability under the
transactions giving rise to the Obligations by reason of this Agreement, nor
shall Secured Party be obligated to perform any of the obligations or duties of
any Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(e)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Continuing Agreement</FONT></U><FONT face=serif size=2>. This Agreement
shall create a continuing security interest in the Collateral and shall remain
in full force and effect until payment in full of the Obligations (other than
unasserted contingent indemnification obligations, including those in Section
2.6 of the Loan Agreement).</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>2.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Representations and
Warranties</FONT></U><FONT face=serif size=2>. To induce Secured Party to enter
into the Loan </FONT><FONT face=serif size=2>Agreement, Grantor represents and
warrants each of the following to Secured Party.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Title; Liens and Encumbrances</FONT></U><FONT face=serif size=2>. Grantor
is (or to the extent that this Agreement states that the Collateral is to be
acquired after the date hereof, will be) the record and beneficial owner of,
having (or to the extent that this Agreement states that the Collateral is to be
acquired after the date hereof, will have) good and marketable title to, the
Collateral pledged by it hereunder, free of any and all Liens or options in
favor of, or claims of, any other person, except the Liens created by this
Agreement and Grantor will promptly notify Secured Party of any such other Lien
or claim made or asserted against the Collateral and will defend the Collateral
against any such Lien or other claim. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(b)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>State of Organization; Legal
Name</FONT></U><FONT face=serif size=2>.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(i)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Grantor&#146;s state of incorporation or organization, chief
executive office is set forth on </FONT><U><FONT face=serif size=2>Schedule
I</FONT></U><FONT face=serif size=2>. Grantor shall promptly notify Secured
Party of any change in the foregoing representations.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(ii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Grantor&#146;s exact legal name is as set
forth on </FONT><U><FONT face=serif size=2>Schedule I</FONT></U><FONT face=serif size=2>.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Grantor currently uses, and during the last five years has
used, no other names including business or trade names, except as set forth on
</FONT><U><FONT face=serif size=2>Schedule I</FONT></U><FONT face=serif size=2>.
Grantor shall not change such name without providing Secured Party 5 Business
Days&#146; prior written notice.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iv)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Grantor&#146;s organizational identification number is as set forth
on </FONT><U><FONT face=serif size=2>Schedule </FONT></U><U><FONT face=serif size=2>I</FONT></U><FONT face=serif size=2>. Grantor shall not change such
organizational identification number without providing Secured Party 5 Business
Days&#146; prior written notice.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(c)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Perfection of Security
Interest</FONT></U><FONT face=serif size=2>.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(i)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>The grant of the security interest in the Collateral, combined
with the filing of financing statements, the execution of the Control Agreement,
and/or possession of the Collateral, each as appropriate, is effective to vest
in Secured Party a valid and perfected first priority security interest,
superior to the rights of any person in and to the Collateral as set forth
herein.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(ii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Grantor authorizes Secured Party to file all such financing
statements and amendments thereto pursuant to the UCC or other notices
appropriate under applicable law, as Secured Party may require, each in form
satisfactory to Secured Party. Such financing statements and amendments may
contain a description of the Collateral as set forth herein or in any generic
manner.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Upon delivery by Secured Party of an invoice therefor, Grantor
shall pay fifty percent (50%) of all filing or recording costs with respect
thereto in all public offices where filing or recording is deemed by Secured
Party to be reasonably necessary.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(iv)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Grantor authorizes Secured Party to take all other action
which Secured Party may deem reasonably necessary to perfect or otherwise
protect the Liens created hereunder and to obtain the benefits of this
Agreement. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>3.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Covenants</FONT></U><FONT face=serif size=2>. Grantor covenants and
agrees with Secured Party that, from and after the date of this Agreement until
the Obligations (other than unasserted contingent indemnification obligations,
including those under Section 2.6 of the Loan Agreement) shall have been paid in
full:</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Instruments and Chattel Paper</FONT></U><FONT face=serif size=2>. No
amount payable under or in connection with any Collateral shall be or become
evidenced by any Instrument or Chattel Paper.</FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(b)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Maintenance of Perfected Security
Interest</FONT></U><FONT face=serif size=2>.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(i)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Grantor shall (A) maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 2(c) and (B) defend such security interest against the
claims and demands of all Persons.</FONT></P>
<P style="PADDING-LEFT: 15pt" align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(ii)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>At any time and from time to time, upon the written request of
Secured Party, Grantor shall promptly and duly execute and deliver, and have
recorded, such further instruments and documents (subject to Section 5.10 of the
Loan Agreement) and take such further action as Secured Party may reasonably
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including the filing of
any financing or continuation statement required under the UCC (or other similar
laws).</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Change of Name or Location</FONT></U><FONT face=serif size=2>. Except
upon 5 Business Days&#146; prior written notice to Secured Party and delivery to
Secured Party of all additional financing statements and other documents
necessary for Secured Party to maintain the validity, perfection and priority of
the security interests provided for herein, Grantor shall not (i) change its
jurisdiction of organization or the location of its chief executive, in each
case from that referred to in Section 2(c) and (ii) change its name, identity or
corporate structure to such an extent that any financing statement filed in
connection with this Agreement would become misleading. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Collateral Account</FONT></U><FONT face=serif size=2>. On or prior to the
Closing Date, and at all times thereafter, Borrower shall direct each of its
Account Debtors with respect to each US Pledged Account to make any and all
payments on such US Pledged Account directly to the Collateral
Account.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>4.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Events of Default</FONT></U><FONT face=serif size=2>. The occurrence of
any one or more Events of Default under the Loan Agreement shall constitute an
event of default (&#147;</FONT><U><FONT face=serif size=2>Event of
Default</FONT></U><FONT face=serif size=2>&#148;) under this Agreement. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>5.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Rights and Remedies</FONT></U><FONT face=serif size=2>. </FONT></P>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Upon the occurrence and during the
continuance of an Event of </FONT><FONT face=serif size=2>Default: (i) Secured
Party may exercise exclusive control over the Collateral; (ii) Secured Party
shall have the right, with or without (to the extent permitted by applicable
law) notice to Grantor, as to any or all of the Collateral, by any available
judicial procedure or without judicial process, to take possession of the
Collateral and without liability for trespass to enter any premises where the
Collateral may be located for the purpose of taking possession of or removing
the Collateral, and generally to exercise any and all rights afforded to a
secured party under the UCC or other applicable law; (iii) Secured Party shall
have the right to sell, lease, or otherwise dispose of all or any part of the
Collateral, whether in its then condition or after further preparation or
processing, either at public or private sale or at any broker&#146;s board, in lots
or in bulk, for cash or for credit, with or without warranties or
representations, and upon such terms and conditions, all as Secured Party in its
sole discretion may deem advisable; (iv) at Secured Party&#146;s request, Grantor
shall assemble the Collateral and make it available to Secured Party at places
which Secured Party shall select, whether at Grantor&#146;s premises or elsewhere,
and make available to Secured Party, without rent, all of Grantor&#146;s premises and
facilities for the purpose of Secured Party&#146;s </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2>taking possession of, removing or
putting the Collateral in saleable or disposable form; (v) Secured Party shall
have the right to receive any and all cash interest, dividends, distributions,
payments or other proceeds paid in respect of the Collateral and made
application thereof to the Obligations in such order as Secured Party may
determine; and (vi) any or all of the Collateral may be registered in the name
of Secured Party or its nominee and they may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Collateral and (y) any and all
rights of conversion, exchange and subscription and any other rights, privileges
or options pertaining to such Collateral as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all securities or securities entitlements upon any merger,
consolidation, reorganization, recapitalization or other fundamental change, or
upon the exercise of Grantor or Secured Party of any right, privilege or option
pertaining to such securities or securities entitlements, and in connection
therewith, the right to deposit and deliver any and all of the securities or
securities entitlements with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as Secured
Party may determine), all without liability except to account for property
actually received by it, but Secured Party shall have no duty to Grantor to
exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Any such sale, lease or other disposition of Collateral may be made
without demand for performance or any notice of advertisement whatsoever except
that where an applicable statute requires reasonable notice of sale or other
disposition, Grantor agrees that the sending of five days notice by ordinary
mail, postage prepaid, to Grantor of the place and time of any public sale or of
the time at which any private sale or other intended disposition is to be made,
shall be deemed reasonable notice thereof. Notwithstanding the foregoing, if any
of the Collateral may be materially diminished in value during such five-day
period, Secured Party shall provide Grantor with such shorter notice as it deems
reasonable under the circumstances. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>The proceeds of any such sale, lease or other disposition of the
Collateral shall be applied first to the expenses of retaking, holding, storing,
processing and preparing for sale, selling, and the like, and to the reasonable
attorneys&#146; fees and legal expenses incurred by Secured Party, and then to
satisfaction of the Obligations (in any order as Secured Party may decide in its
sole discretion), and to the payment of any other amounts required by applicable
law. If, upon the sale, lease or other disposition of the Collateral, the
proceeds thereof are insufficient to pay all amounts to which Secured Party is
legally entitled, Borrower will be liable for the deficiency, together with
interest thereon, at the rate prescribed in the agreements giving rise to the
Obligations, and the reasonable fees of any attorneys employed by Secured Party
to collect such deficiency. To the extent permitted by applicable law, Grantor
waives all claims, damages and demands against Secured Party arising out of the
repossession, removal, retention or sale of the Collateral. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(d)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Upon request of Secured Party, at any time after the occurrence of an
Event of Default, Grantor shall notify obligors on the US Pledged Accounts that
the US Pledged Accounts have been assigned to Secured Party and that payments in
respect thereof shall be made directly to Secured Party. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(e)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Notwithstanding anything herein to the contrary, Grantor shall remain
liable under each of the US Pledged Accounts to observe and perform all
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Secured Party
shall not have any obligation or any liability under any US Pledged Account (or
any agreement giving rise thereto) by reason of or arising out of this Agreement
or the receipt by Secured Party of any payment relating thereto, nor shall
Secured Party be obligated in any manner to perform any of the obligations of
Grantor under or pursuant to any US Pledged Account (or any agreement giving
rise thereto), to make any payment, to make any inquiry as to the nature or
sufficiency of the payment </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT size=2>received by it or as to the sufficiency of any
party thereunder, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(f)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Secured Party hereby authorizes Grantor to collect the US Pledged
Accounts, subject to Secured Party&#146;s direction and control after the occurrence
of an Event of Default, and Secured Party may curtail or terminate said
authority at any time at any time after the occurrence of an Event of Default.
Any payments on US Pledged Accounts when collected by Grantor after the
occurrence and during the continuance of an Event of Default, (i) shall be
forewith (and in any event no later than 2 Business Days) deposited by Grantor in
the exact form received, duly endorsed by Grantor to Secured Party if required,
in an account maintained under the sole dominion and control of Secured Party
and (ii) until so turned over, shall be held by Grantor in trust for Secured
Party, segregated from other funds of Grantor. Each such deposit of Proceeds of
US Pledged Accounts shall be accompanied by a report indentifying in reasonable
detail the nature and source of the payments included in the deposit.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(g)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>The parties hereto agree that, upon the occurrence and during the
continuance of an Event of Default, Secured Party shall appoint a third party
administrator (the &#147;</FONT><U><FONT face=serif size=2>Administrator</FONT></U><FONT face=serif size=2>&#148;) that will take any
remedial or enforcement action available to Secured Party pursuant to this
Agreement or under applicable law on Secured Party&#146;s behalf and at Secured
Party&#146;s sole direction. For the avoidance of doubt, the parties hereto agree
that (i) AlixPartners or a similar entity shall be deemed to be acceptable to
each party to act as Administrator, (ii) Borrower shall not be required to
deliver any information to Lender to the extent that Borrower reasonably
believes that disclosure of such information to Lender is not consistent with,
or is likely to violate, applicable competition laws and (iii) Borrower shall be
required to deliver such information to the Administrator to the extent such
information is reasonably necessary in connection with any remedial or
enforcement action taken on behalf of or at the direction of Secured Party by
Administrator; </FONT><U><FONT face=serif size=2>provided</FONT></U><FONT face=serif size=2> that Administrator shall not share such information with
Lender. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>6.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Power of Attorney</FONT></U><FONT face=serif size=2>. Subject to Section
5(g), Grantor authorizes Secured Party and does hereby make, constitute and
appoint Secured Party and any officer or agent of Secured Party, with full power
of substitution, as Grantor&#146;s true and lawful attorney-in-fact, with power, in
its own name or in the name of Grantor: (i) to endorse any notes, checks,
drafts, money orders, or other instruments of payment (including payments
payable under or in respect of any policy of insurance) in respect of the
Collateral that may come into possession of Secured Party; (ii) to pay or
discharge any taxes, liens, security interest or other encumbrances at any time
levied or placed on or threatened against the Collateral; (iii) to demand,
collect, issue receipt for, compromise, settle and sue for monies due in respect
of the Collateral; (iv) to receive, open and dispose of all mail addressed to
Grantor and to notify the post office authorities to change the address for
delivery of mail addressed to Grantor to such address as Secured Party may
designate; (v) to exercise all membership rights, powers and privileges in
connection with the Collateral to the same extent as Grantor is entitled to
exercise such rights, powers and privileges; and (vi) generally to do all acts
and things which Secured Party deems necessary to protect, preserve and realize
upon the Collateral and Secured Party&#146;s security interest therein. Grantor
hereby approves and ratifies all acts of said attorney or designee, who shall
not be liable for any acts of commission or omission, nor for any error or
judgment or mistake of fact or law except for its own gross negligence or
willful misconduct. This power of attorney shall be irrevocable for the term of
this Agreement and thereafter as long as any of the Obligations shall be
outstanding. Secured Party may exercise this power of attorney only after the
occurrence and during the continuance of an Event of Default. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>7.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Notices</FONT></U><FONT face=serif size=2>. Notices shall be given in the
manner, to the addresses and with the effect provided in Section 7.1 of the Loan
Agreement. </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify><FONT face=serif size=2><FONT size=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>8.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>No Waiver; Rights
Cumulative</FONT></U><FONT face=serif size=2>. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>No
course of dealing between Grantor and Secured Party, or Secured Party&#146;s failure
to exercise or delay in exercising any right, power or privilege hereunder shall
operate as a waiver thereof. Any single or partial exercise of any right, power
or privilege hereunder shall not preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>All of Secured Party&#146;s rights and remedies with respect to the
Collateral, whether established hereby or by any other agreements, instruments
or documents or by law, shall be cumulative and may be exercised singly or
concurrently. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>9.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Limitation on Secured Party&#146;s Duty in Respect of
Collateral</FONT></U><FONT face=serif size=2>. Secured Party shall not have any
duty as to any Collateral in its possession or control or in the possession or
control of any agent or nominee of it or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto, except that Secured Party shall use reasonable care with respect to the
Collateral in its possession or under its control.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>10.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Amendments, Etc</FONT></U><FONT face=serif size=2>. No amendment or
waiver of any provision of this Agreement nor consent to any departure by
Secured Party therefrom shall in any event be effective unless the same shall be
in writing, approved by Secured Party and signed by Secured Party, and then any
such waiver or consent shall only be effective in the specific instance and for
the specific purpose for which given. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>11.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Successors and Assigns</FONT></U><FONT face=serif size=2>. This Agreement
and all obligations of Grantor and Secured Party hereunder shall be binding upon
the permitted successors and assigns of Grantor and Secured Party, as
applicable, and shall, together with the rights and remedies of Secured Party
hereunder, inure to the benefit of Secured Party, Grantor and each of their
respective successors and assigns. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>12.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>No Partnership</FONT></U><FONT face=serif size=2>. The relationship
between Secured Party and Grantor shall be only of creditor-debtor and no
relationship of agency, partner or joint- or co-venturer shall be created by or
inferred from this Agreement or the other Credit Documents. Grantor shall
indemnify, defend, and save Secured Party harmless from any and all claims
asserted against Secured Party as being the agent, partner, or joint-venturer of
Grantor. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>13.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Entire Agreement</FONT></U><FONT face=serif size=2>. This Agreement
embodies the entire agreement and understanding between Grantor and Secured
Party with respect to its subject matter and supersedes all prior conflicting or
inconsistent agreements, consents and understandings relating to such subject
matter. Grantor acknowledges and agrees that there is no oral agreement between
Grantor and Secured Party which has not been incorporated in this Agreement.
</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>14.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Counterparts</FONT></U><FONT face=serif size=2>. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or electronic
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>15.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Severability</FONT></U><FONT face=serif size=2>. Any provision of this
Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without effecting the validity, legality and
enforceability of the remaining provisions thereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction. </FONT></P>

<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2>16.<FONT face=sans-serif> </FONT><U><FONT face=serif>Governing Law; Jurisdiction; Consent
to Service of Process</FONT></U><FONT face=serif>.</FONT></FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(a)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, except to the extent the UCC provides for the
application of the law of another state.</FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(b)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR
STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT
AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW
YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, GRANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION,
AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT
IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT,
ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE
SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT OR </FONT><FONT face=serif size=2>INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY
SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GRANTOR AGREES NOT TO
SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT
BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO
GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, GRANTOR
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>(c)</FONT><FONT face=sans-serif size=2> </FONT><FONT face=serif size=2>Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 7.1 of the Loan Agreement. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>17.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Headings</FONT></U><FONT face=serif size=2>. Section headings used herein
are for convenience of reference only, are not part of this Agreement and shall
not affect the construction of, or be taken into consideration in interpreting,
this Agreement. </FONT></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>18.</FONT><FONT face=sans-serif size=2> </FONT><U><FONT face=serif size=2>Reinstatement</FONT></U><FONT face=serif size=2>. Grantor further agrees
that, if any payment made by Grantor or other Person and applied to the
Obligations is at any time annulled, avoided, set aside, rescinded, invalidated,
declared to be fraudulent or preferential or otherwise required to be refunded
or repaid, or the proceeds of Collateral are required to be returned by Secured
Party to Grantor, its estate, trustee, receiver or any other party, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, any Lien or other Collateral securing
such liability shall be and remain in full force and effect, as fully as if such
payment had never been made or, if prior thereto the Lien granted hereby or
other Collateral securing such liability hereunder shall have been released or
terminated by virtue of such cancellation or surrender), such Lien or other
Collateral shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect any Lien or other Collateral securing the obligations of
Grantor in respect of the amount of such payment. </FONT></P>
<P align=center><FONT face=serif size=2>[</FONT><B><FONT face=serif size=2>REMAINDER OF PAGE INTENTIONALLY LEFT BLANK</FONT></B><FONT face=serif size=2>] </FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>IN
WITNESS WHEREOF, the undersigned party has executed this Agreement to be
effective for all purposes as of the date above first written. </FONT></P>
<DIV align=right>
<TABLE cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR>
    <TD noWrap align=justify width="99%" colSpan=2><STRONG><FONT size=2>KEMET
      ELECTRONICS CORPORATION</FONT></STRONG> </TD></TR>
  <TR>
    <TD noWrap align=justify width="1%"></TD>
    <TD noWrap align=justify width="98%">&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=justify width="1%"></TD>
    <TD noWrap align=justify width="98%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #ffffff 1pt solid" noWrap align=justify width="1%"><FONT size=2>By</FONT><FONT size=3>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=justify width="98%"><FONT size=2><FONT face=serif>/s/ Per-Olof
      Loof</FONT></FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="1%">&nbsp;</TD>
    <TD noWrap align=justify width="98%"><FONT size=2>Name:&nbsp;Per-Olof
      Loof</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="1%">&nbsp;</TD>
    <TD noWrap align=justify width="98%"><FONT size=2>Title:&nbsp;&nbsp;&nbsp;CEO</FONT>&nbsp;
</TD></TR></TABLE></DIV><BR>
<HR align=center width="100%" noShade SIZE=2>
<PAGE>
<P align=center><U><FONT size=2>Schedule 1</FONT></U></P>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=justify width="49%"><FONT face=serif size=2>Grantor&#146;s
      State of Incorporation</FONT>&nbsp; </TD>
    <TD noWrap align=justify width="50%"><FONT face=serif size=2>Delaware</FONT>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=justify width="49%"></TD>
    <TD noWrap align=justify width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="49%"><FONT face=serif size=2>Grantor&#146;s
      Exact Legal Name</FONT>&nbsp; </TD>
    <TD noWrap align=justify width="50%"><FONT face=serif size=2>KEMET
      Electronics Corporation</FONT>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=justify width="49%"></TD>
    <TD noWrap align=justify width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="49%"><FONT face=serif size=2>Trade or
      Other Names Used by Grantor</FONT>&nbsp; </TD>
    <TD noWrap align=justify width="50%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="49%"><FONT face=serif size=2>During the
      Last Five Years</FONT>&nbsp; </TD>
    <TD noWrap align=justify width="50%"><FONT face=serif size=2>None</FONT>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=justify width="49%"></TD>
    <TD noWrap align=justify width="50%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=justify width="49%"><FONT face=serif size=2>Grantor&#146;s
      Organizational ID</FONT>&nbsp; </TD>
    <TD noWrap align=justify width="50%"><FONT face=serif size=2>2121179</FONT>&nbsp; </TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>


</BODY>

</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>5
<FILENAME>exhibit31-1.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO RULE 13A-14(A) OR 15D-14(A)
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">

<P align=right><FONT face=serif size=2>Exhibit 31.1</FONT></P>
<P align=center><B><FONT face=serif size=2>CERTIFICATIONS</FONT></B></P>
<P align=justify><FONT face=serif size=2>I, Dr. Gerald Paul, certify that:
</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>1.</FONT></TD>
    <TD vAlign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>I have reviewed this
      quarterly report on Form 10-Q of Vishay Intertechnology,
Inc.;</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>2.</FONT></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>Based on my knowledge,
      this report does not contain any untrue statement of a material fact or
      omit to state a material fact necessary to make the statements made, in
      light of the circumstances under which such statements were made, not
      misleading with respect to the period covered by this report;</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>3.</FONT></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>Based on my knowledge,
      the financial statements, and other financial information included in this
      report, fairly present in all material respects the financial condition,
      results of operations and cash flows of the registrant as of, and for, the
      periods presented in this report;</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>4.</FONT></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>The registrant's other
      certifying officer(s) and I are responsible for establishing and
      maintaining disclosure controls and procedures (as defined in Exchange Act
      Rules 13a-15(e) and 15d-15(e)) and internal control over financial
      reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
      the registrant and have:</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(a) Designed such disclosure controls and procedures, or caused
      such disclosure controls and procedures to be designed under our
      supervision, to ensure that material information relating to the
      registrant, including its consolidated subsidiaries, is made known to us
      by others within those entities, particularly during the period in which
      this report is being prepared;</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(b) Designed such internal control over financial reporting, or
      caused such internal control over financial reporting to be designed under
      our supervision, to provide reasonable assurance regarding the reliability
      of financial reporting and the preparation of financial statements for
      external purposes in accordance with generally accepted accounting
      principles;</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(c) Evaluated the effectiveness of the registrant's disclosure
      controls and procedures and presented in this report our conclusions about
      the effectiveness of the disclosure controls and procedures, as of the end
      of the period covered by this report based on such evaluation;
    and</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(d) Disclosed in this report any change in the registrant's
      internal control over financial reporting that occurred during the
      registrant's most recent fiscal quarter that has materially affected, or
      is reasonably likely to materially affect, the registrant's internal
      control over financial reporting; and</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>5.</FONT></TD>
    <TD vAlign=top></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>The registrant's other
      certifying officer(s) and I have disclosed, based on our most recent
      evaluation of internal control over financial reporting, to the
      registrant's auditors and the audit committee of the registrant's board of
      directors (or persons performing the equivalent functions):</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(a) All significant deficiencies and material weaknesses in the
      design or operation of internal control over financial reporting which are
      reasonably likely to adversely affect the registrant's ability to record,
      process, summarize and report financial information; and</FONT></TD></TR>
  <TR>
    <TD vAlign=top colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top>&nbsp;</TD>
    <TD vAlign=top></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(b) Any fraud, whether or not material, that involves management or
      other employees who have a significant role in the registrant's internal
      control over financial reporting.</FONT></TD></TR></TABLE>
<P align=justify><FONT face=serif size=2>Date:&nbsp; November 4, 2008</FONT></P>
<P align=justify><U><FONT face=serif size=2>/s/ Gerald Paul</FONT></U><FONT face=serif size=2><BR>Dr. Gerald Paul<BR>Chief Executive Officer</FONT></P>
<HR align=center width="100%" noShade SIZE=2>


</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>6
<FILENAME>exhibit31-2.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO RULE 13A-14(A) OR 15D-14(A)
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">

<P align=right><FONT face=serif size=2>Exhibit 31.2</FONT></P>
<P align=center><B><FONT face=serif size=2>CERTIFICATIONS</FONT></B></P>
<P align=justify><FONT face=serif size=2>I, Dr. Lior E. Yahalomi, certify
that:</FONT></P>
<TABLE style="TEXT-ALIGN: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>1.</FONT></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>I have reviewed this
      quarterly report on Form 10-Q of Vishay Intertechnology,
Inc.;</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>2.</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>Based on my knowledge,
      this report does not contain any untrue statement of a material fact or
      omit to state a material fact necessary to make the statements made, in
      light of the circumstances under which such statements were made, not
      misleading with respect to the period covered by this report;</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>3.</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>Based on my knowledge,
      the financial statements, and other financial information included in this
      report, fairly present in all material respects the financial condition,
      results of operations and cash flows of the registrant as of, and for, the
      periods presented in this report;</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>4.</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>The registrant's other
      certifying officer(s) and I are responsible for establishing and
      maintaining disclosure controls and procedures (as defined in Exchange Act
      Rules 13a-15(e) and 15d-15(e)) and internal control over financial
      reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
      the registrant and have:</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(a) Designed such disclosure controls and procedures, or caused
      such disclosure controls and procedures to be designed under our
      supervision, to ensure that material information relating to the
      registrant, including its consolidated subsidiaries, is made known to us
      by others within those entities, particularly during the period in which
      this report is being prepared;</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(b) Designed such internal control over financial reporting, or
      caused such internal control over financial reporting to be designed under
      our supervision, to provide reasonable assurance regarding the reliability
      of financial reporting and the preparation of financial statements for
      external purposes in accordance with generally accepted accounting
      principles;</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(c) Evaluated the effectiveness of the registrant's disclosure
      controls and procedures and presented in this report our conclusions about
      the effectiveness of the disclosure controls and procedures, as of the end
      of the period covered by this report based on such evaluation;
    and</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(d) Disclosed in this report any change in the registrant's
      internal control over financial reporting that occurred during the
      registrant's most recent fiscal quarter that has materially affected, or
      is reasonably likely to materially affect, the registrant's internal
      control over financial reporting; and</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>5.</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>The registrant's other
      certifying officer(s) and I have disclosed, based on our most recent
      evaluation of internal control over financial reporting, to the
      registrant's auditors and the audit committee of the registrant's board of
      directors (or persons performing the equivalent functions):</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(a) All significant deficiencies and material weaknesses in the
      design or operation of internal control over financial reporting which are
      reasonably likely to adversely affect the registrant's ability to record,
      process, summarize and report financial information; and</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap>&nbsp;</TD>
    <TD vAlign=top noWrap></TD>
    <TD style="PADDING-LEFT: 15pt" vAlign=top width="100%"><FONT face=serif size=2>(b) Any fraud, whether or not material, that involves management or
      other employees who have a significant role in the registrant's internal
      control over financial reporting.</FONT></TD></TR></TABLE>
<P align=justify><FONT face=serif size=2>Date: November 4, 2008</FONT></P>
<P align=justify><U><FONT face=serif size=2>/s/ Lior E. Yahalomi</FONT></U><FONT face=serif size=2><BR>Dr. Lior E. Yahalomi<BR>Chief Financial Officer
</FONT></P>
<HR align=center width="100%" noShade SIZE=2>


</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>7
<FILENAME>exhibit32-1.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">

<P align=right><FONT face=serif size=2>Exhibit 32.1</FONT></P>
<P align=center><B><FONT face=serif size=2>CERTIFICATION PURSUANT TO<BR>18
U.S.C. SECTION 1350,<BR>AS ADOPTED PURSUANT TO<BR></FONT></B><B><FONT face=serif size=2>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</FONT></B></P>
<P align=justify><FONT face=serif size=2>In connection with the Quarterly Report
of Vishay Intertechnology, Inc. (the &#147;Company&#148;) on Form 10-Q for the fiscal
quarter ended September 27, 2008 as filed with the Securities and Exchange
Commission on the date hereof (the &#147;Report&#148;), I, Dr. Gerald Paul, Chief
Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350,
as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002,
that:</FONT></P>
<TABLE cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(1)</FONT></TD>
    <TD vAlign=top noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>The Report fully
      complies with the requirements of section 13(a) or 15(d) of the Securities
      Exchange Act of 1934; and</FONT></TD></TR>
  <TR>
    <TD vAlign=top width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(2)</FONT></TD>
    <TD vAlign=top noWrap></TD>
    <TD vAlign=top width="100%"><FONT face=serif size=2>The information
      contained in the Report fairly presents, in all material respects, the
      financial condition and results of operations of the
  Company.</FONT></TD></TR></TABLE>
<P align=justify><U><FONT face=serif size=2>/s/ Gerald Paul</FONT></U><FONT face=serif size=2><BR>Dr. Gerald Paul<BR>Chief Executive Officer<BR>November 4,
2008</FONT></P>
<HR align=center width="100%" noShade SIZE=2>


</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>8
<FILENAME>exhibit32-2.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">

<P align=right><FONT face=serif size=2>Exhibit 32.2</FONT></P>
<P align=center><B><FONT face=serif size=2>CERTIFICATION PURSUANT TO<BR>18
U.S.C. SECTION 1350,<BR>AS ADOPTED PURSUANT TO<BR></FONT></B><B><FONT face=serif size=2>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</FONT></B></P>
<P align=justify><FONT face=serif size=2>In connection with the Quarterly Report
of Vishay Intertechnology, Inc. (the &#147;Company&#148;) on Form 10-Q for the fiscal
quarter ended September 27, 2008 as filed with the Securities and Exchange
Commission on the date hereof (the &#147;Report&#148;), I, Dr. Lior E. Yahalomi, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350,
as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002,
that:</FONT></P>
<TABLE style="text-align: justify" cellSpacing=0 cellPadding=0 border=0>

  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(1)</FONT></TD>
    <TD noWrap></TD>
    <TD width="100%"><FONT face=serif size=2>The Report fully complies with
      the requirements of section 13(a) or 15(d) of the Securities Exchange Act
      of 1934; and</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=3>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top noWrap><FONT face=serif size=2>(2)</FONT></TD>
    <TD noWrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD width="100%"><FONT face=serif size=2>The information contained in the
      Report fairly presents, in all material respects, the financial condition
      and results of operations of the Company.</FONT></TD></TR></TABLE>
<P align=justify><U><FONT face=serif size=2>/s/ Lior E. Yahalomi</FONT></U><FONT face=serif size=2><BR>Dr. Lior E. Yahalomi<BR>Chief Financial
Officer<BR>November 4, 2008</FONT></P>
<HR align=center width="100%" noShade SIZE=2>



</BODY>

</HTML>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
