The credit facility includes limits or restrictions on, among other things, incurring indebtedness, incurring liens on assets, making investments and acquisitions, making asset sales, repurchasing our common stock, and paying cash dividends and making other restricted payments. The credit facility also requires us to comply with other covenants, including the maintenance of specific financial ratios.
49 -------------------------------------------------------------------------------- The financial maintenance covenants include (a) an interest expense coverage ratio of not less than 2.00 to 1; and (b) a leverage ratio of not more than 3.25 to 1 (and a pro forma ratio of 2.75 to 1 on the date of incurrence of additional debt). The computation of these ratios is prescribed in Article 6 of the Credit Agreement between
Vishay Intertechnology, Inc.and JPMorgan Chase Bank, N.A., which has been filed with the SECas Exhibit 10.1 to our current report on Form 8-K filed December 1, 2010. We were in compliance with all covenants under the credit facility at June 29, 2013. Our interest expense coverage ratio and leverage ratio were 9.43 to 1 and 2.01 to 1, respectively. We expect to continue to be in compliance with these covenants based on current projections. If we are not in compliance with all of the required financial covenants, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable. Additionally, our exchangeable unsecured notes due 2102 and our convertible senior debentures due 2040, due 2041, and due 2042 have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated. Our permitted capacity to repurchase shares of our outstanding common stock under the credit facility increases each quarter by an amount equal to 20% of net income. At June 29, 2013, our credit facility allows us to repurchase up to $186.6 millionof our common stock. The amount and timing of any future stock repurchases remains subject to authorization of our Board of Directors. The balance of our revolving credit facility was $89 millionat December 31, 2012. We borrowed $51 millionand repaid $40 millionon our credit facility during the six fiscal months ended June 29, 2013. The average outstanding balance on our credit facility calculated at fiscal month-ends was $97.8 millionand the highest amount outstanding on our credit facility at a month end was $110 millionduring the six fiscal months ended June 29, 2013. Management expects to continue to maintain the outstanding balance on the credit facility around its current level, and may periodically pay down the balance with available cash or use the credit facility to meet short-term financing needs. We expect that cash on-hand and cash flows from operations will be sufficient to meet our longer-term financing needs related to normal operating requirements and our research and development and capital expenditure plans. Acquisition activity or share repurchases may require additional borrowing under our credit facility or may otherwise require us to incur additional debt.