SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A (Amendment No. 3) Under the Securities Exchange Act of 1934 PSi Technologies Holdings, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Shares, par value 1 2/3 Philippine Pesos per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 74438Q 10 9 - -------------------------------------------------------------------------------- (CUSIP Number) c/o Merrill Lynch Global Emerging Markets Partners, L.P. 4 World Financial Center North Tower New York, NY 10080 Telephone: (212) 449-1000 With a copy to: Frank J. Marinaro, Esq. Merrill Lynch & Co., Inc. 4 World Financial Center North Tower New York, NY 10080 Telephone: (212) 449-1000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 2, 2005 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-l(e), 13d-1(f) or 13d-l(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See Section 240.13d-7(b) for other parties to whom copies are to be sent. The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Note). 2 SCHEDULE 13D/A - ---------------------------- CUSIP No. 74438Q 10 9 - ---------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Merrill Lynch Global Emerging Markets Partners, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY Not Applicable EACH ------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 17,911,367* ------------------------------------------------------- 9 SOLE DISPOSITIVE POWER Not Applicable - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 17,911,367* - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 17,911,367* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 74.5%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - -------------------------------------------------------------------------------- 3 SCHEDULE 13D/A - ---------------------------- CUSIP No. 74438Q 10 9 - ---------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Merrill Lynch Global Capital, L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY Not Applicable EACH ------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 17,911,367* ------------------------------------------------------- 9 SOLE DISPOSITIVE POWER Not Applicable - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 17,911,367* - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 17,911,367* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 74.5%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- 4 SCHEDULE 13D/A - ---------------------------- CUSIP No. 74438Q 10 9 - ---------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Merrill Lynch Global Partners, Inc. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY Not Applicable EACH ------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 17,911,367* ------------------------------------------------------- 9 SOLE DISPOSITIVE POWER Not Applicable - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 17,911,367* - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 17,911,367* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 74.5%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- 5 SCHEDULE 13D/A - ---------------------------- CUSIP No. 74438Q 10 9 - ---------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON ML IBK Positions, Inc. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY Not Applicable EACH ------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 17,911,367* ------------------------------------------------------- 9 SOLE DISPOSITIVE POWER Not Applicable - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 17,911,367* - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 17,911,367* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 74.5%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- 6 SCHEDULE 13D/A - ---------------------------- CUSIP No. 74438Q 10 9 - ---------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Merrill Lynch Group, Inc. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY Not Applicable EACH ------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 17,911,367* ------------------------------------------------------- 9 SOLE DISPOSITIVE POWER Not Applicable - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 17,911,367* - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 17,911,367* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 74.5%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON HC, CO - -------------------------------------------------------------------------------- 7 SCHEDULE 13D/A - ---------------------------- CUSIP No. 74438Q 10 9 - ---------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Merrill Lynch & Co., Inc. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY Not Applicable EACH ------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 17,911,367* ------------------------------------------------------- 9 SOLE DISPOSITIVE POWER Not Applicable - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 17,911,367* - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 17,911,367* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 74.5%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON HC, CO - -------------------------------------------------------------------------------- 8 SCHEDULE 13D/A - ---------------------------- CUSIP No. 74438Q 10 9 - ---------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Merrill Lynch Global Emerging Markets Partners, LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY Not Applicable EACH ------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 10,769,743*. See Item 5. ------------------------------------------------------- 9 SOLE DISPOSITIVE POWER Not Applicable - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 10,769,743*. See Item 5. - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,769,743*. See Item 5. - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 44.8%*. See Item 5. - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- 9 SCHEDULE 13D/A - ---------------------------- CUSIP No. 74438Q 10 9 - ---------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Merrill Lynch Global Emerging Markets Partners II, LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY OWNED BY Not Applicable EACH ------------------------------------------------------- REPORTING 8 SHARED VOTING POWER PERSON WITH 10,769,743*. See Item 5. ------------------------------------------------------- 9 SOLE DISPOSITIVE POWER Not Applicable - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 10,769,743*. See Item 5. - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,769,743*. See Item 5. - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 44.8%*. See Item 5. - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- 10 * Includes 7,000,000, shares of common stock of the issuer issuable pursuant to the Exchange Agreement, attached hereto as Exhibit 2, representing 34.5% of the currently outstanding common stock of the Issuer and assuming the issuance of such 7,000,000 shares of common stock. 11 This Amendment No. 3 to Schedule 13D (this "Third Amendment") amends and supplements the Schedule 13D (the "Schedule 13D"), Amendment No. 1 to the Schedule 13D (the "First Amendment") and Amendment No. 2 to the Schedule 13D (the "Second Amendment") filed by the parties with the Securities and Exchange Commission on June 7, 2001, June 16, 2003 and July 11, 2003, respectively. Except as specifically amended below, all other provisions of the Schedule 13D, the First Amendment and the Second Amendment remain in effect. Item 2. Identity and Background. The following paragraphs amend and supplement Item 2: This Third Amendment is being filed jointly by the parties to the Schedule 13D, the First Amendment and the Second Amendment. Appendix B is amended to include the following information with respect to the executive officers and directors of the parties jointly filing the Schedule 13D: (a) name; (b) business address (or residence where indicated); (c) present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted; and (d) citizenship. Item 4. Purpose of Transaction. The following paragraphs amend and supplement Item 4: On June 2, 2005, Merrill Lynch Global Emerging Markets Partners, LLC ("MLGEMP LLC"), PSi Technologies Holdings, Inc. (the "Issuer") and PSi Technologies, Inc. ("PSi Technologies") entered into a Purchase Agreement (the "Purchase Agreement") pursuant to which MLGEMP LLC purchased from PSi Technologies a $7.0 million aggregate principal amount 10.00% Exchangeable Senior Subordinated Note (the "Note") for cash consideration of $7.0 million. The terms of the Note provide that PSi Technologies will pay interest on the unpaid principal amount of the Note at a rate per annum equal to 10.00%, payable semi-annually in arrears on each interest payment date as set forth in the Note. However, if on any such interest payment date (i) PSi Technologies is prohibited from paying cash interest due to restrictions set forth in the Note, (ii) Issuer's financial performance for the two consecutive fiscal quarters ending immediately prior to such interest payment date is below a certain threshold or (iii) PSi Technologies does not pay all or a portion of the interest due on the Note on such interest payment date in 2005, then PSi Technologies may elect to pay all or any portion of such interest by adding it to the principal amount of the Note. Such amount will bear interest at the aforesaid rate and will no longer be considered to be interest due. 12 The terms of the Note also provide that if, after 3 years from the date of the Note, the average price of PSi Technologies' American Depository Shares as traded during a 30-consecutive day period on the Nasdaq SmallCap Market is at least $2.00 and the average daily trading volume during such period is equal to at least 33.33% of the number of shares of the common stock of the Issuer for which the Note is then exchangeable, then PSi Technologies may notify MLGEMP LLC that it desires to redeem the Note at a price equal to the aggregate principal amount then outstanding, plus accrued but unpaid interest thereon. Prior to the redemption date specified in such notice, MLGEMP LLC may exchange or assign all or a portion of the Note as described below. On June 2, 2005, MLGEMP LLC, the Issuer and PSi Technologies entered into an Exchange Agreement (the "Exchange Agreement") pursuant to which the Issuer granted MLGEMP LLC an irrevocable right to exchange all or part of the Note for up to 7,000,000 shares of common stock of the Issuer (the "Exchange Rights") at a per share price of $1.00 (the "Note Exercise Price"). The Note Exercise Price is subject to reduction if the Issuer fails to meet two performance targets. If (i) the Issuer fails to meet the first performance target, then the Note Exercise Price will be reduced to $0.90 and (ii) the Issuer fails to meet the second target then (a) the Note Exercise Price will be reduced to $0.90 if the Note Exercise Price was not reduced pursuant to (i) above or (b) the Note Exercise Price will be reduced to $0.80 if the Note Exercise Price was reduced pursuant to (i) above. MLGEMP LLC may also, in its sole discretion, elect to replace all of its Exchange Rights with the right (the "Mandatory Issuance Rights") to assign a portion or all of the Note to the Issuer and subscribe for shares of common stock of the Issuer at a price per share equal to the then par value of one share of common stock of the Issuer. If MLGEMP LLC exercises its Mandatory Issuance Rights, the number of shares of common stock of the Issuer to be issued to MLGEMP LLC shall be determined by dividing the principal amount of the portion of the Note to be exchanged by the Note Exercise Price then in effect. The Note Exercise Price is subject to anti-dilution adjustments as stated in the Exchange Agreement, which take effect if the Issuer issues or sells Common Stock or Common Stock Equivalents (as defined in the Exchange Agreement) without consideration or at a price per share less than their current market price while any Exchange Right or Mandatory Issuance Right is outstanding. The descriptions of the Purchase Agreement, the Exchange Agreement and the Note contained in this Third Amendment do not purport to be complete and are qualified by the complete text of the agreements filed as Exhibits to this Third Amendment. Item 5. Interest in Securities of the Issuer. The following paragraphs amend and supplement Item 5: On June 2, 2005 MLGEMP LLC purchased from PSi Technologies a $7.0 million aggregate principal amount 10.00% Exchangeable Senior Subordinated Note for cash consideration of $7.0 million. Pursuant to the Exchange Agreement, MLGEMP LLC has Exchange Rights or Mandatory Issuance Rights, at its option, to exchange the Note for or to subscribe to 7,000,000 shares of common stock of the Issuer at the Note Exercise Price of $1.00 per share. If (i) the Issuer fails to meet the first performance target, then the Note Exercise Price will be reduced to $0.90 and MLGEMP LLC can exchange the Note for 7,777,778 shares of common stock of the Issuer and (ii) if the Issuer fails to meet the second target then (a) the Note 13 Exercise Price will be reduced to $0.90 if the Note Exercise Price was not reduced pursuant to (i) above, and MLGEMP LLC can exchange the Note for 7,777,778 shares of common stock of the Issuer, or (b) the Note Exercise Price will be reduced to $0.80 if the Note Exercise Price was reduced pursuant to (i) above, and MLGEMP LLC can exchange the Note for 8,750,000 shares of common stock of the Issuer; provided however, that if the Issuer pays any of the accrued interest by adding it to the principal amount of the Note, such number of shares shall be increased accordingly. The Note Exercise Price is subject to anti-dilution adjustments as stated in the Exchange Agreement, which take effect if the Issuer issues or sells Common Stock or Common Stock Equivalents (as defined in the Exchange Agreement) without consideration or at a price per share less than their current market price while any Exchange Right or Mandatory Issuance Right is outstanding. The issuance of the Note and the entry into the Exchange Agreement triggered an adjustment to the note exercise price (the "2003 Note Exercise Price") with respect to the $4.0 million aggregate principal amount 10% Senior Subordinated Note issued by PSi Technologies to MLGEMP LLC on July 3, 2003 (the "2003 Note"). The 2003 Note Exercise Price was reduced from $1.15, the 2003 Note Exercise Price in effect prior to the issuance of the Note and entry into the Exchange Agreement, to $1.06 pursuant to the anti-dilution adjustment provisions contained in the exchange agreement, dated July 3, 2003, among MLGEMP LLC, the Issuer and PSi Technologies (the "2003 Exchange Agreement") entered into in connection with the issuance of the 2003 Note. Following this adjustment to the 2003 Note Exercise Price, the 2003 Note may be exchanged for up to 3,769,743 shares of common stock of the Issuer pursuant to the terms of the 2003 Exchange Agreement. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. The following paragraphs amend and supplement Item 6: On June 2, 2005, MLGEMP LLC, the Issuer and PSi Technologies entered into the Purchase Agreement pursuant to which MLGEMP LLC purchased a $7.0 million aggregate principal amount 10.00% Exchangeable Senior Subordinated Note from PSi Technologies for cash consideration of $7.0 million. The terms of the Note provide that PSi Technologies will pay interest on the unpaid principal amount of the Note at a rate per annum equal to 10.00%, payable semi-annually in arrears on each interest payment date as set forth in the Note. However, if on any such interest payment date (i) PSi Technologies is prohibited from paying cash interest due to restrictions set forth in the Note, (ii) Issuer's financial performance for the two consecutive fiscal quarters ending immediately prior to such interest payment date is below a certain threshold or (iii) PSi Technologies does not pay all or a portion of the interest due on the Note on such interest payment date in 2005, then PSi Technologies may elect to pay all or any portion of such interest by adding it to the principal amount of the Note. Such amount will bear interest at the aforesaid rate and will no longer be considered to be interest due. On June 2, 2005, MLGEMP LLC, the Issuer and PSi Technologies entered into the Exchange Agreement pursuant to which the Issuer granted MLGEMP LLC the Exchange Rights at the Note Exercise Price. The Note Exercise Price is subject to reduction if the Issuer fails to meet two performance targets. If (i) the Issuer fails to meet the first performance target, then the Note Exercise Price will be reduced to $0.90 and (ii) if the Issuer fails to meet the second target then (a) the Note Exercise Price will be reduced to $0.90 if the Note Exercise Price was not reduced pursuant to (i) above or (b) the Note Exercise Price will be reduced $0.80 if the Note Exercise Price was reduced pursuant to (i) above. MLGEMP LLC may also, in its sole discretion, elect to exercise its Mandatory Issuance Rights. If MLGEMP LLC exercises its Mandatory Issuance Rights, the number of shares of common stock of the Issuer to be issued to MLGEMP LLC shall be determined by dividing the principal amount of the portion of the Note to be exchanged by the Note Exercise Price then in effect. The Note Exercise Price is subject to anti-dilution adjustments as stated in the Exchange Agreement, which take effect if the Issuer issues or sells Common Stock or Common Stock Equivalents without consideration or at a price 14 per share less than their current market price while any Exchange Right or Mandatory Issuance Right is outstanding. The descriptions of the Purchase Agreement, the Exchange Agreement and the Note contained in this Third Amendment do not purport to be complete and are qualified by the complete text of the agreements filed as Exhibits to this Third Amendment. Item 7. Materials to be filed as Exhibits. 1. Purchase Agreement dated as of June 2, 2005, by and between Merrill Lynch Global Emerging Markets Partners, LLC, PSi Technologies Holdings, Inc. and PSi Technologies, Inc. 2. Exchange Agreement dated as June 2, 2005, by and between Merrill Lynch Global Emerging Markets Partners, LLC, PSi Technologies Holdings, Inc. and PSi Technologies, Inc. 3. $7,000,000 10.00% Exchangeable Senior Subordinated Note dated as of June 2, 2005. 15 SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this Amendment is true, complete and correct. Date: June 2, 2005 MERRILL LYNCH GLOBAL EMERGING MERRILL LYNCH & CO., INC. MARKETS PARTNERS, LLC By: /S/ Frank J. Marinaro --------------------- Name: Frank J. Marinaro By: Merrill Lynch Global Emerging Partners, L.P., Title: Authorized Person* as its Managing Member MERRILL LYNCH GROUP, INC. By: Merrill Lynch Global Capital L.L.C., as its General Partner By: /S/ Frank J. Marinaro --------------------- Name: Frank J. Marinaro By: Merrill Lynch Global Partners, Inc., Title: Authorized Person* as its Managing Member ML IBK POSITIONS, INC. By: /S/ Frank J. Marinaro ---------------------- Name: Frank J. Marinaro By: /S/ Frank J. Marinaro Title: Vice President and Secretary --------------------- Name: Frank J. Marinaro Title: Vice President and Secretary MERRILL LYNCH GLOBAL EMERGING MERRILL LYNCH GLOBAL MARKETS PARTNERS II, LLC PARTNERS, INC. By: /S/ Frank J. Marinaro By: Merrill Lynch Global Emerging Partners, L.P., --------------------- as its Managing Member Name: Frank J. Marinaro Title: Vice President and Secretary By: Merrill Lynch Global Capital L.L.C., as its General Partner By: Merrill Lynch Global Partners, Inc., as its Managing Member By: /S/ Frank J. Marinaro --------------------- Name: Frank J. Marinaro Title: Vice President and Secretary 16 MERRILL LYNCH GLOBAL EMERGING MARKETS PARTNERS, L.P. By: Merrill Lynch Global Capital, L.L.C. Its General Partner By: Merrill Lynch Global Partners, Inc. Its Managing Member By: /S/ Frank Marinaro ------------------ Name: Frank J. Marinaro Title: Vice President and Secretary MERRILL LYNCH GLOBAL CAPITAL, L.L.C. By: Merrill Lynch Global Partners, Inc. Its Managing Member By: /S/ Frank Marinaro ------------------ Name: Frank J. Marinaro Title: Vice President and Secretary * The Powers of Attorney filed with the Commission on February 9, 2001 in connection with the reporting persons' Schedule 13G regarding the Issuer are hereby incorporated by reference. 17 APPENDIX B EXECUTIVE OFFICERS AND DIRECTORS The names and principal occupations of each of the executive officers and directors of Merrill Lynch Global Partners, Inc., ML IBK Positions, Inc., Merrill Lynch Group, Inc. and Merrill Lynch & Co., Inc. are set forth below. Unless otherwise noted, all of these persons are United States citizens, and have as their business address 4 World Financial Center, New York, NY 10080. MERRILL LYNCH GLOBAL EMERGING MARKETS PARTNERS, LLC Merrill Lynch Global Emerging Markets Partners, L.P. is the managing member of Merrill Lynch Global Emerging Markets Partners, LLC. See Appendix A and the information set forth below with respect to Merrill Lynch Global Emerging Markets Partners, L.P. MERRILL LYNCH GLOBAL EMERGING MARKETS PARTNERS II, LLC Merrill Lynch Global Emerging Markets Partners, L.P. is the managing member of Merrill Lynch Global Emerging Markets Partners II, LLC. See Appendix A and the information set forth below with respect to Merrill Lynch Global Emerging Markets Partners, L.P. MERRILL LYNCH GLOBAL EMERGING MARKETS PARTNERS, L.P. Merrill Lynch Global Capital, L.L.C. is the general partner of Merrill Lynch Global Emerging Markets Partners, L.P. See Appendix A and the information set forth below with respect to Merrill Lynch Global Capital, L.L.C. MERRILL LYNCH GLOBAL CAPITAL, L.L.C. Merrill Lynch Global Partners, Inc. is the managing member of Merrill Lynch Global Capital, L.L.C. See Appendix A and the information set forth below with respect to Merrill Lynch Global Partners, Inc. MERRILL LYNCH GLOBAL PARTNERS, INC. EXECUTIVE OFFICERS AND DIRECTORS PRESENT PRINCIPAL OCCUPATION Nathan C. Thorne Managing Director, Global Private Equity Director, President George A. Bitar Managing Director, Global Private Equity Director, Vice President Jerome P. Kenney Managing Director, Investment Banking Director 18 Guido Padovano Managing Director, Global Private Equity Director, Vice President Citizenship: Italy Mandakini Puri Managing Director, Global Private Equity Director, Vice President Brian A. Renaud Managing Director, Global Private Equity Director, Vice President ML IBK POSITIONS, INC. EXECUTIVE OFFICERS AND DIRECTORS PRESENT PRINCIPAL OCCUPATION Gary M. Carlin First Vice President, Investment President Banking Finance Nathan C. Thorne Managing Director, Global Private Equity Director, Vice President George A. Bitar Managing Director, Global Private Equity Director, Vice President Mandakini Puri Managing Director, Global Private Equity Director, Vice President MERRILL LYNCH GROUP, INC. EXECUTIVE OFFICERS AND DIRECTORS PRESENT PRINCIPAL OCCUPATION Richard A. Alsop First Vice President, Corporate Law Director and Vice President Kevin K. Dolan First Vice President, Corporate Tax Director, Vice President Haig J. Nargesian First Vice President, Corporate Finance Director, Vice President and Treasurer Kathleen Skero First Vice President, Corporate Finance President and Director MERRILL LYNCH & CO., INC. EXECUTIVE OFFICERS AND DIRECTORS PRESENT PRINCIPAL OCCUPATION Rosemary T. Berkery Executive Vice President; General Counsel Executive Officer 19 Jill K. Conway Visiting Scholar, Massachusetts Institute Director of Technology c/o Corporate Secretary's Office 222 Broadway, 17th Floor New York, NY 10038 Alberto Cribiore Managing Partner, Brera Capital Partners Director c/o Corporate Secretary's Office 222 Broadway, 17th Floor New York, NY 10038 Robert C. Doll Senior Vice President; President and Executive Officer Chief Investment Officer, Merrill Lynch Investment Managers Jeffrey N. Edwards Senior Vice President, Chief Financial Executive Officer Officer Ahmass L. Fakahany Executive Vice President; Chief Executive Officer Administrative Officer John D. Finnegan Chairman of the Board of The Chubb Director Corporation c/o Corporate Secretary's Office 222 Broadway, 17th Floor New York, NY 10038 Gregory J. Fleming Executive Vice President; President, Executive Officer Global Markets and Investment Banking James P. Gorman Executive Vice President; President, Executive Officer Global Private Client Do Woo Kim Executive Vice President; President, Executive Officer Global Markets and Investment Banking Robert J. McCann Executive Vice President; President, Executive Officer Vice Chairman, Wealth Management Group Heinz-Joachim Neuburger Executive Vice President and Chief Director Financial Officer of Siemens AG; Member Citizenship: Germany of the Executive Committee of the Managing Board of Siemens AG c/o Corporate Secretary's Office 222 Broadway, 17th Floor New York, NY 10038 20 David K. Newbigging Chairman of the Board of Friends' Director Provident plc Citizenship: United Kingdom c/o Corporate Secretary's Office 222 Broadway, 17th Floor New York, NY 10038 E. Stanley O'Neal Chairman of the Board, President and Director and Executive Officer Chief Executive Officer Aulana L. Peters Corporate Director Director c/o Corporate Secretary's Office 222 Broadway, 17th Floor New York, NY 10038 Joseph W. Prueher Corporate Director, Consulting Professor Director to the Stanford-Harvard Preventive Defense Project c/o Corporate Secretary's Office 222 Broadway, 17th Floor New York, NY 10038 Ann N. Reese Co-Founder and Co-Executive Director of Director the Center for Adoption Policy c/o Corporate Secretary's Office 222 Broadway, 17th Floor New York, NY 10038 Charles O. Rossotti Senior Advisor to The Carlyle Group Director c/o Corporate Secretary's Office 222 Broadway, 17th Fl. New York, NY 10038 Laurence A. Tosi Managing Director, Finance Director Executive Officer 21 INDEX TO EXHIBITS Exhibit No. Description 1. Purchase Agreement dated as of June 2, 2005, by and between Merrill Lynch Global Emerging Markets Partners, LLC, PSi Technologies Holdings, Inc. and PSi Technologies, Inc. 2. Exchange Agreement dated as June 2, 2005, by and between Merrill Lynch Global Emerging Markets Partners, LLC, PSi Technologies Holdings, Inc. and PSi Technologies, Inc. 3. $7,000,000 10.00% Exchangeable Senior Subordinated Note dated as of June 2, 2005. 22