Individuals hired on or after January 1, 2007 and individuals who retired from Texas Instruments, including Mr. Wroe, are not eligible for Retiree Health & Dental benefits from
Sensata. Ms. Sullivan, Mr. Cote, Mr. Carter, Mr. Major and Mr. Dane are eligible for this plan.
Perquisites. In addition to the components of compensation discussed above, we offer perquisites to our executive officers group,
including the Named Executive Officers, in the form of financial counseling. See the Summary Compensation Table below for a listing of the reportable perquisites for the Named Executive Officers.
Employment Agreements, Change-In-Control Provisions and One-Time Payments
We have employment agreements in place
with all of our Named Executive Officers. The agreements are for a one-year term, automatically renewing for successive additional one-year terms. Each Named Executive Officer is entitled to an annual base salary and is eligible to earn an annual
incentive bonus and participate in profit sharing in an amount equal to a certain percentage of his or her annual base salary, as previously described. If any Named Executive Officer, other than Mr. Wroe, is terminated without cause
or if the Named Executive Officer terminates his or her employment for good reason during the employment term, then the Named Executive Officer will be entitled to a severance payment equal to one year of his or her annual base salary
rate plus an amount equal to the average of the Named Executive Officers annual bonus for the two years preceding his or her termination. If Mr. Wroe is terminated without cause or Mr. Wroe terminates his employment for
good reason during his employment term, Mr. Wroe will be entitled to a severance payment equal to two years of his annual base salary rate plus an amount equal to the annual bonus payments Mr. Wroe received for the two years
preceding his termination.
Under the employment
agreements, cause means one or more of the following: (i) the indictment for a felony or other crime involving moral turpitude or the commission of any other act or any omission to act involving fraud with respect to the issuer or any of
its subsidiaries or any of their customers or suppliers; (ii) any act or any omission to act involving dishonesty or disloyalty which causes, or in the good faith judgment of STIs board of directors would be reasonably likely to cause,
material harm (including reputational harm) to the issuer or any of its subsidiaries or any of their customers or suppliers; (iii) any (A) repeated abuse of alcohol or (B) abuse of controlled substances, in either case, that adversely affects the
Named Executives work performance (and, in the case of clause (A), continues to occur at any time more than 30 days after the Named Executive has been given written notice thereof) or brings the issuer or its subsidiaries into public disgrace
or disrepute; (iv) the failure by the Named Executive to substantially perform duties as reasonably directed by STIs board of directors or the Named Executive Officers supervisor(s), which non-performance remains uncured for 10 days
after written notice thereof is given to the Named Executive; (v) willful misconduct with respect to the issuer or any of its subsidiaries, which misconducts causes, or in the good faith judgment of STIs board of directors would be reasonably
likely to cause, material harm (including reputational harm) to the issuer or any of its subsidiaries; or (vi) any breach by the Named Executive of certain provisions of the employment agreements or any other material breach of the employment
agreements, the 2006 Purchase Plan or 2006 Option Plan.
Under the employment agreements, good reason means the Named Executive Officer resigns from employment with STI and its subsidiaries prior to the end of the term of his or her employment agreement as a result of one or more of
the following reasons: (i) any reduction in base salary or bonus opportunity, without prior consent, in either case other than any reduction which (A) is generally applicable to senior leadership team executives of STI and (B) does not exceed 15% of
the Named Executive Officers base salary and bonus opportunity in the aggregate; (ii) any material breach by the issuer or any of its subsidiaries of any agreement with the Named Executive Officer; (iii) a change in principal office without
prior consent to a location that is more than 50 miles from the Named Executive Officers principal office on the date hereof; (iv) delivery by STI of a notice of non-renewal of the term of the employment agreement; or (v) in the case of Mr.
Wroes and Ms. Sullivans agreements, a material diminution in job responsibilities without prior consent; provided that any such reason was not cured by STI within 30 days after delivery of written notice thereof to STI; and further