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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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reserved for issuance and to change the vesting rules by eliminating the Tranche 3 performance level requirement and changing the performance measure of Tranche 3 options to that of the Tranche 2 options. This performance target represents a return on investment to the Sponsor prior to and in connection with an initial public offering which is at least two (2) times the Sponsors’ investment prior to such initial public offering. The performance target will be achieved if the per share offering price in this offering is approximately $11.60 or greater, depending on the date this offering is completed. As a result of the existing economic environment, the option plans were modified to create an incentive for holders of the options. In effect, Tranche 3 options were converted to Tranche 2 options. In addition, the vesting provisions changed from cliff-vesting over a five-year period of 0%, 40%, 20%, 20%, 20% to straight-line vesting over a five-year period at 20% per year. We implemented this amendment to the vesting term to more closely align our vesting conditions to public companies of similar size in terms of revenue and within similar industries. We examined companies such as AMETEK, Inc., Amphenol Corporation, Analog Devices, Inc. and FLIR Systems, Inc. in making this vesting change. The vesting schedule for these companies is shown in the table below.

 

Company

  

Stock Option

Vesting Schedule

AMETEK, Inc.    25% over 4 years (straight-line)
Amphenol Corporation    20% over 5 years (straight-line)
Analog Devices, Inc.    20% over 5 years (straight-line)
FLIR Systems, Inc.   

3 years-Earnings Per Share Performance Vesting

 

On September 4, 2009, we issued Tranche 1 options to each of the following Named Executive Officers: Thomas Wroe, 225,000; Jeffrey Cote, 250,000; and Martha Sullivan, 200,000. The 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. The exercise price of these options was reset on December 8, 2009 to $14.80, the fair market value of the ordinary shares on September 4, 2009. All other terms and provisions of the options granted, including the dates of vesting, remained unchanged and in full force and effect. In addition, on December 9, 2009, we issued restricted securities to each of the following Named Executive Officers: Thomas Wroe, 83,600; Jeffrey Cote, 92,900; and Martha Sullivan, 74,300. These restricted securities will vest on a straight-line basis over a five-year period at 20% per year. On December 9, 2009, we also issued 116,667 Tranche 1 and 233,333 Tranche 2 options to Martin Carter in consideration of his compensation and experience.

 

The number of options and restricted securities issued to each Named Executive Officer was intended to serve as compensation for the Named Executive Officer’s performance during fiscal year 2009, an incentive for the Named Executive Officer to sustain his or her level of performance in the future, and as a retention mechanism. The Chief Executive Officer and the compensation committee (or the board of directors of STI with respect to the grant made to the Chief Executive Officer) together determined the number of options and restricted securities to be issued to each Named Executive Officer. The Chief Executive Officer, the compensation committee and the board of directors considered several factors and applied significant judgment in determining the size of these grants. The grants were not calculated based on a pre-determined set of criteria. However, factors considered included our financial performance, as measured by Adjusted EBITDA, during fiscal year 2009 through the date of grant, restructuring activities and other cost savings initiatives implemented during fiscal year 2009 which contributed to the fiscal year 2009 Adjusted EBITDA of $325.1 million, continued compliance with our debt covenants, as required under the Senior Secured Credit Facility, at each quarter-end date throughout fiscal year 2009, the accomplishments of each Named Executive Officer’s business or functional area of responsibility, and the expected value of the grant relative to the Named Executive Officer’s annual total compensation.

 

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