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Sensata Technologies Holding N.V.'s SEC Filings

S-1/A
SENSATA TECHNOLOGIES HOLDING PLC filed this Form S-1/A on 03/09/2010
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disposition. The assumed time to liquidity and probability of an initial public offering versus a disposition are based on management’s judgment with input from our board of directors. If a liquidity event occurs, we will be required to recognize compensation expense over the remaining service period of the awards, including a cumulative catch-up adjustment for previously unrecognized compensation expense, regardless of whether or not the Sponsors achieve the specified returns. As of December 31, 2009, there was $21.2 million of unrecognized compensation expense related to non-vested Tranche 2 options, including former Tranche 3 options that were converted to Tranche 2 options during the three months ended September 30, 2009. We expect this offering to qualify as a liquidity event.

 

The forfeiture rate is based on our estimated forfeitures by plan participants due to the lack of historical forfeiture data necessary to provide a reasonable basis upon which to estimate a rate.

 

We granted the following share-based awards during the year ended December 31, 2009:

 

Grant Date

  Number of
options
  Number of
restricted
stock units
  Original
Exercise
Price
  Modified
Exercise
Price
  Fair value
of ordinary

shares on
date of grant
  Fair value of
ordinary
shares on
date of most
recent
modification
  Intrinsic
value per
share based
on fair value
of ordinary
shares as of
December 31,
2009
             

May 21, 2009(1)

  75,000     $ 6.30   $ 14.80   $ 6.30   $ 17.48   $ 5.23

September 4, 2009(2)

  950,000       7.00     14.80     14.80     17.48     5.23

December 9, 2009

  350,000       17.48     NA     17.48     NA     2.55

December 9, 2009(3)

    380,900     NA     NA     17.48     NA     20.03

 

 

(1)   The award granted on May 21, 2009 for 75,000 options was cancelled and reissued on September 4, 2009. The exercise price of the reissued award increased from $6.30 to $7.00. On December 8, 2009, the award was again cancelled and reissued. The exercise price of the reissued award increased from $7.00 to $14.80.
(2)   On December 8, 2009, the exercise price of the options granted on September 4, 2009 was reset to $14.80, the fair market value of the ordinary shares on September 4, 2009. Our board of directors determined that the exercise price of the options granted on September 4, 2009 was established at less than the fair market value of the underlying shares. All other terms and provisions of the options granted, including the dates of vesting, remained unchanged and in full force and effect.
(3)   We measured the fair value of the restricted stock units on the date of grant in accordance with ASC 718, based on the date on which we and the grantees reached a mutual understanding as to the key terms and conditions of the share-based awards. We determined the fair value of the restricted stock units on December 9, 2009, the date of grant, to be $17.48 per share. The restricted stock units were legally issued under Dutch law on February 22, 2010. We believe the fair value and intrinsic value of the restricted stock units on February 22, 2010 was $19.00 per share, which is the mid-point of the price range set forth on the cover page of this prospectus. Had we utilized the fair value of the restricted stock units as of February 22, 2010, the aggregate fair value of the restricted stock unit awards would have been $7.2 million compared to an aggregate fair value of $6.7 million using the grant date fair value of the restricted stock units as of December 9, 2009, and, as a result, would not have had a material impact on our reported compensation expense in any period.

 

During 2009, we amended our First Amended and Restated Sensata Technologies Holding B.V. 2006 Management Option Plan to increase the ordinary shares reserved for issuance and to change the vesting rules by changing the performance measure of Tranche 3 options to equal that of the Tranche 2 options, effectively converting the Tranche 3 options to Tranche 2 options. See “Executive Compensation—Components of Compensation—Equity Compensation” for further discussion of our share-based payment plans.

 

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