ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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ENGLAND AND WALES
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|
98-1386780
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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|
|
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Interface House, Interface Business Park
Bincknoll Lane
Royal Wootton Bassett
Swindon SN4 8SY
United Kingdom
|
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+1 (508) 236 3800
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(Address of Principal Executive Offices, including Zip Code)
|
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(Registrant’s Telephone Number, Including Area Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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PART I
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II
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|
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Item 1.
|
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Item 1A.
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Item 2.
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Item 3.
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Item 6.
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Item 1.
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Financial Statements.
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
828,266
|
|
|
$
|
753,089
|
|
Accounts receivable, net of allowances of $13,446 and $12,947 as of March 31, 2018 and December 31, 2017, respectively
|
627,749
|
|
|
556,541
|
|
||
Inventories
|
459,699
|
|
|
446,129
|
|
||
Prepaid expenses and other current assets
|
102,868
|
|
|
92,532
|
|
||
Total current assets
|
2,018,582
|
|
|
1,848,291
|
|
||
Property, plant and equipment, net
|
753,965
|
|
|
750,049
|
|
||
Goodwill
|
3,005,464
|
|
|
3,005,464
|
|
||
Other intangible assets, net of accumulated amortization of $1,802,070 and $1,767,001 as of March 31, 2018 and December 31, 2017, respectively
|
885,569
|
|
|
920,124
|
|
||
Deferred income tax assets
|
33,615
|
|
|
33,003
|
|
||
Other assets
|
85,681
|
|
|
84,594
|
|
||
Total assets
|
$
|
6,782,876
|
|
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$
|
6,641,525
|
|
Liabilities and shareholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt, capital lease and other financing obligations
|
$
|
8,178
|
|
|
$
|
15,720
|
|
Accounts payable
|
350,999
|
|
|
322,671
|
|
||
Income taxes payable
|
22,313
|
|
|
31,544
|
|
||
Accrued expenses and other current liabilities
|
284,419
|
|
|
259,560
|
|
||
Total current liabilities
|
665,909
|
|
|
629,495
|
|
||
Deferred income tax liabilities
|
341,550
|
|
|
338,228
|
|
||
Pension and other post-retirement benefit obligations
|
40,007
|
|
|
40,055
|
|
||
Capital lease and other financing obligations, less current portion
|
27,735
|
|
|
28,739
|
|
||
Long-term debt, net
|
3,221,676
|
|
|
3,225,810
|
|
||
Other long-term liabilities
|
35,058
|
|
|
33,572
|
|
||
Total liabilities
|
4,331,935
|
|
|
4,295,899
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Ordinary shares, €0.01 nominal value per share, 177,069 and 400,000 shares authorized, and 171,419 and 178,437 shares issued, as of March 31, 2018 and December 31, 2017, respectively
|
2,199
|
|
|
2,289
|
|
||
Treasury shares, at cost, 7,076 shares as of December 31, 2017
|
—
|
|
|
(288,478
|
)
|
||
Additional paid-in capital
|
1,668,583
|
|
|
1,663,367
|
|
||
Retained earnings
|
835,807
|
|
|
1,031,612
|
|
||
Accumulated other comprehensive loss
|
(55,648
|
)
|
|
(63,164
|
)
|
||
Total shareholders’ equity
|
2,450,941
|
|
|
2,345,626
|
|
||
Total liabilities and shareholders’ equity
|
$
|
6,782,876
|
|
|
$
|
6,641,525
|
|
|
For the three months ended
|
||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
Net revenue
|
$
|
886,293
|
|
|
$
|
807,271
|
|
Operating costs and expenses:
|
|
|
|
||||
Cost of revenue
|
582,457
|
|
|
532,419
|
|
||
Research and development
|
36,001
|
|
|
31,804
|
|
||
Selling, general and administrative
|
81,322
|
|
|
70,114
|
|
||
Amortization of intangible assets
|
35,069
|
|
|
40,258
|
|
||
Restructuring and other charges, net
|
3,766
|
|
|
11,050
|
|
||
Total operating costs and expenses
|
738,615
|
|
|
685,645
|
|
||
Profit from operations
|
147,678
|
|
|
121,626
|
|
||
Interest expense, net
|
(38,429
|
)
|
|
(40,277
|
)
|
||
Other, net
|
(4,633
|
)
|
|
4,719
|
|
||
Income before taxes
|
104,616
|
|
|
86,068
|
|
||
Provision for income taxes
|
14,126
|
|
|
14,332
|
|
||
Net income
|
$
|
90,490
|
|
|
$
|
71,736
|
|
Basic net income per share:
|
$
|
0.53
|
|
|
$
|
0.42
|
|
Diluted net income per share:
|
$
|
0.52
|
|
|
$
|
0.42
|
|
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For the three months ended
|
||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
Net income
|
$
|
90,490
|
|
|
$
|
71,736
|
|
Other comprehensive income, net of tax:
|
|
|
|
||||
Cash flow hedges
|
6,539
|
|
|
132
|
|
||
Defined benefit and retiree healthcare plans
|
977
|
|
|
480
|
|
||
Other comprehensive income
|
7,516
|
|
|
612
|
|
||
Comprehensive income
|
$
|
98,006
|
|
|
$
|
72,348
|
|
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For the three months ended
|
||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
90,490
|
|
|
$
|
71,736
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
27,855
|
|
|
28,795
|
|
||
Amortization of debt issuance costs
|
1,805
|
|
|
1,857
|
|
||
Share-based compensation
|
5,090
|
|
|
3,952
|
|
||
Loss on debt financing
|
2,350
|
|
|
—
|
|
||
Amortization of intangible assets
|
35,069
|
|
|
40,258
|
|
||
Deferred income taxes
|
636
|
|
|
3,400
|
|
||
Unrealized loss on hedges and other
|
8,819
|
|
|
2,120
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(71,208
|
)
|
|
(32,915
|
)
|
||
Inventories
|
(13,570
|
)
|
|
(17,354
|
)
|
||
Prepaid expenses and other current assets
|
(2,147
|
)
|
|
(9,643
|
)
|
||
Accounts payable and accrued expenses
|
47,780
|
|
|
26,704
|
|
||
Income taxes payable
|
(9,231
|
)
|
|
3,099
|
|
||
Other
|
(483
|
)
|
|
(2,308
|
)
|
||
Net cash provided by operating activities
|
123,255
|
|
|
119,701
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property, plant and equipment and capitalized software
|
(30,938
|
)
|
|
(33,059
|
)
|
||
Proceeds from the sale of assets
|
—
|
|
|
2,937
|
|
||
Net cash used in investing activities
|
(30,938
|
)
|
|
(30,122
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from exercise of stock options and issuance of ordinary shares
|
2,219
|
|
|
2,450
|
|
||
Payments on debt
|
(11,325
|
)
|
|
(11,122
|
)
|
||
Payments to repurchase ordinary shares
|
—
|
|
|
(498
|
)
|
||
Payments of debt issuance costs
|
(5,813
|
)
|
|
(137
|
)
|
||
Other
|
(2,221
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(17,140
|
)
|
|
(9,307
|
)
|
||
Net change in cash and cash equivalents
|
75,177
|
|
|
80,272
|
|
||
Cash and cash equivalents, beginning of period
|
753,089
|
|
|
351,428
|
|
||
Cash and cash equivalents, end of period
|
$
|
828,266
|
|
|
$
|
431,700
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Finished goods
|
$
|
192,486
|
|
|
$
|
195,089
|
|
Work-in-process
|
94,446
|
|
|
92,678
|
|
||
Raw materials
|
172,767
|
|
|
158,362
|
|
||
Inventories
|
$
|
459,699
|
|
|
$
|
446,129
|
|
|
|
Cash Flow Hedges
|
|
Defined Benefit and Retiree Healthcare Plans
|
|
Accumulated Other Comprehensive Loss
|
||||||
Balance as of December 31, 2017
|
|
$
|
(28,179
|
)
|
|
$
|
(34,985
|
)
|
|
$
|
(63,164
|
)
|
Other comprehensive (loss)/income before reclassifications, net of tax
|
|
(3,275
|
)
|
|
578
|
|
|
(2,697
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss, net of tax
|
|
9,814
|
|
|
399
|
|
|
10,213
|
|
|||
Other comprehensive income
|
|
6,539
|
|
|
977
|
|
|
7,516
|
|
|||
Balance as of March 31, 2018
|
|
$
|
(21,640
|
)
|
|
$
|
(34,008
|
)
|
|
$
|
(55,648
|
)
|
|
|
|
|
|
|
|
||||
|
|
Loss/(Gain) Reclassified from Accumulated Other Comprehensive Loss
|
Affected Line in Condensed Consolidated Statements of Operations
|
|||||||
|
|
For the three months ended
|
|
|||||||
Component
|
|
March 31, 2018
|
|
March 31, 2017
|
|
|||||
Derivative instruments designated and qualifying as cash flow hedges:
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
$
|
10,884
|
|
|
$
|
(5,385
|
)
|
|
Net revenue
(1)
|
Foreign currency forward contracts
|
|
826
|
|
|
6,568
|
|
|
Cost of revenue
(1)
|
||
Foreign currency forward contracts
|
|
1,376
|
|
|
—
|
|
|
Other, net
(1)
|
||
Total, before taxes
|
|
13,086
|
|
|
1,183
|
|
|
Income before taxes
|
||
Income tax effect
|
|
(3,272
|
)
|
|
(295
|
)
|
|
Provision for income taxes
|
||
Total, net of taxes
|
|
$
|
9,814
|
|
|
$
|
888
|
|
|
Net income
|
|
|
|
|
|
|
|
||||
Defined benefit and retiree healthcare plans
|
|
$
|
224
|
|
|
$
|
502
|
|
|
Other, net
(2)
|
Income tax effect
|
|
175
|
|
|
(22
|
)
|
|
Provision for income taxes
|
||
Total, net of taxes
|
|
$
|
399
|
|
|
$
|
480
|
|
|
Net income
|
(1)
|
See Note 12, "Derivative Instruments and Hedging Activities," for additional details on amounts to be reclassified in the future from Accumulated other comprehensive loss.
|
(2)
|
See Note 8, "Pension and Other Post-Retirement Benefits," for additional details of net periodic benefit cost.
|
|
|
Severance
|
||
Balance at December 31, 2017
|
|
$
|
7,583
|
|
Charges, net of reversals
|
|
3,604
|
|
|
Payments
|
|
(2,817
|
)
|
|
Impact of changes in foreign currency exchange rates
|
|
294
|
|
|
Balance at March 31, 2018
|
|
$
|
8,664
|
|
|
|
Maturity Date
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Term Loan
|
|
October 14, 2021
|
|
$
|
917,794
|
|
|
$
|
927,794
|
|
4.875% Senior Notes
|
|
October 15, 2023
|
|
500,000
|
|
|
500,000
|
|
||
5.625% Senior Notes
|
|
November 1, 2024
|
|
400,000
|
|
|
400,000
|
|
||
5.0% Senior Notes
|
|
October 1, 2025
|
|
700,000
|
|
|
700,000
|
|
||
6.25% Senior Notes
|
|
February 15, 2026
|
|
750,000
|
|
|
750,000
|
|
||
Less: discount
|
|
|
|
(17,233
|
)
|
|
(14,424
|
)
|
||
Less: deferred financing costs
|
|
|
|
(26,607
|
)
|
|
(27,758
|
)
|
||
Less: current portion
|
|
|
|
(2,278
|
)
|
|
(9,802
|
)
|
||
Long-term debt, net
|
|
|
|
$
|
3,221,676
|
|
|
$
|
3,225,810
|
|
|
|
|
|
|
|
|
||||
Capital lease and other financing obligations
|
|
|
|
$
|
33,635
|
|
|
$
|
34,657
|
|
Less: current portion
|
|
|
|
(5,900
|
)
|
|
(5,918
|
)
|
||
Capital lease and other financing obligations, less current portion
|
|
|
|
$
|
27,735
|
|
|
$
|
28,739
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
|
||||||||||||||||||||||||||
|
Defined Benefit
|
|
Retiree Healthcare
|
|
Defined Benefit
|
|
Total
|
||||||||||||||||||||||||
|
March 31,
|
|
March 31,
|
|
March 31,
|
|
March 31,
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
21
|
|
|
$
|
831
|
|
|
$
|
602
|
|
|
$
|
850
|
|
|
$
|
623
|
|
Interest cost
|
327
|
|
|
420
|
|
|
70
|
|
|
80
|
|
|
342
|
|
|
249
|
|
|
739
|
|
|
749
|
|
||||||||
Expected return on plan assets
|
(428
|
)
|
|
(553
|
)
|
|
—
|
|
|
—
|
|
|
(237
|
)
|
|
(221
|
)
|
|
(665
|
)
|
|
(774
|
)
|
||||||||
Amortization of net loss
|
300
|
|
|
285
|
|
|
—
|
|
|
8
|
|
|
25
|
|
|
71
|
|
|
325
|
|
|
364
|
|
||||||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
(334
|
)
|
|
(333
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(335
|
)
|
|
(334
|
)
|
||||||||
Loss on settlement
|
530
|
|
|
472
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
530
|
|
|
472
|
|
||||||||
Gain on curtailment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(296
|
)
|
|
—
|
|
|
(296
|
)
|
|
—
|
|
||||||||
Net periodic benefit cost/(credit)
|
$
|
729
|
|
|
$
|
624
|
|
|
$
|
(245
|
)
|
|
$
|
(224
|
)
|
|
$
|
664
|
|
|
$
|
700
|
|
|
$
|
1,148
|
|
|
$
|
1,100
|
|
|
For the three months ended March 31, 2017
|
||||||||||
|
As reported
|
|
ASU No. 2017-07 Adjustment
|
|
As Adjusted
|
||||||
Net revenue
|
$
|
807,271
|
|
|
$
|
—
|
|
|
$
|
807,271
|
|
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of revenue
|
532,726
|
|
|
(307
|
)
|
|
532,419
|
|
|||
Research and development
|
31,814
|
|
|
(10
|
)
|
|
31,804
|
|
|||
Selling, general and administrative
|
70,274
|
|
|
(160
|
)
|
|
70,114
|
|
|||
Amortization of intangible assets
|
40,258
|
|
|
—
|
|
|
40,258
|
|
|||
Restructuring and other charges, net
|
11,050
|
|
|
—
|
|
|
11,050
|
|
|||
Total operating costs and expenses
|
686,122
|
|
|
(477
|
)
|
|
685,645
|
|
|||
Profit from operations
|
121,149
|
|
|
477
|
|
|
121,626
|
|
|||
Interest expense, net
|
(40,277
|
)
|
|
—
|
|
|
(40,277
|
)
|
|||
Other, net
|
5,196
|
|
|
(477
|
)
|
|
4,719
|
|
|||
Income before taxes
|
$
|
86,068
|
|
|
$
|
—
|
|
|
$
|
86,068
|
|
|
For the three months ended
|
||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
Stock options
|
$
|
1,289
|
|
|
$
|
1,425
|
|
Restricted securities
|
3,801
|
|
|
2,527
|
|
||
Share-based compensation expense
|
$
|
5,090
|
|
|
$
|
3,952
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forward contracts
|
$
|
—
|
|
|
$
|
12,590
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,955
|
|
|
$
|
—
|
|
Commodity forward contracts
|
—
|
|
|
2,906
|
|
|
—
|
|
|
—
|
|
|
6,458
|
|
|
—
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
15,496
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,413
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forward contracts
|
$
|
—
|
|
|
$
|
43,317
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40,969
|
|
|
$
|
—
|
|
Commodity forward contracts
|
—
|
|
|
2,067
|
|
|
—
|
|
|
—
|
|
|
1,104
|
|
|
—
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
45,384
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42,073
|
|
|
$
|
—
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
Carrying
Value
(1)
|
|
Fair Value
|
|
Carrying
Value
(1)
|
|
Fair Value
|
||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Term Loan
|
$
|
917,794
|
|
|
$
|
—
|
|
|
$
|
923,530
|
|
|
$
|
—
|
|
|
$
|
927,794
|
|
|
$
|
—
|
|
|
$
|
930,114
|
|
|
$
|
—
|
|
4.875% Senior Notes
|
$
|
500,000
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
|
$
|
—
|
|
|
$
|
521,875
|
|
|
$
|
—
|
|
5.625% Senior Notes
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
416,000
|
|
|
$
|
—
|
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
439,000
|
|
|
$
|
—
|
|
5.0% Senior Notes
|
$
|
700,000
|
|
|
$
|
—
|
|
|
$
|
691,250
|
|
|
$
|
—
|
|
|
$
|
700,000
|
|
|
$
|
—
|
|
|
$
|
741,125
|
|
|
$
|
—
|
|
6.25% Senior Notes
|
$
|
750,000
|
|
|
$
|
—
|
|
|
$
|
785,625
|
|
|
$
|
—
|
|
|
$
|
750,000
|
|
|
$
|
—
|
|
|
$
|
813,750
|
|
|
$
|
—
|
|
Notional
(in millions)
|
|
Effective Date(s)
|
|
Maturity Date(s)
|
|
Index
|
|
Weighted- Average Strike Rate
|
|
Hedge Designation
|
52.0 EUR
|
|
March 27, 2018
|
|
April 30, 2018
|
|
Euro to U.S. Dollar Exchange Rate
|
|
1.24 USD
|
|
Not designated
|
403.5 EUR
|
|
Various from May 2016 to March 2018
|
|
Various from April 2018 to February 2020
|
|
Euro to U.S. Dollar Exchange Rate
|
|
1.17 USD
|
|
Designated
|
772.0 CNY
|
|
March 27, 2018
|
|
April 27, 2018
|
|
U.S. Dollar to Chinese Renminbi Exchange Rate
|
|
6.31 CNY
|
|
Not designated
|
811.0 CNY
|
|
Various from October 2017 to January 2018
|
|
Various from April to December 2018
|
|
U.S. Dollar to Chinese Renminbi Exchange Rate
|
|
6.71 CNY
|
|
Designated
|
375.0 JPY
|
|
March 28, 2018
|
|
April 27, 2018
|
|
U.S. Dollar to Japanese Yen Exchange Rate
|
|
105.99 JPY
|
|
Not designated
|
617.6 JPY
|
|
January 25, 2018
|
|
Various from April to December 2018
|
|
U.S. Dollar to Japanese Yen Exchange Rate
|
|
107.23 JPY
|
|
Designated
|
38,245.5 KRW
|
|
Various from May 2016 to March 2018
|
|
Various from April 2018 to February 2020
|
|
U.S. Dollar to Korean Won Exchange Rate
|
|
1,115.52 KRW
|
|
Designated
|
9.9 MYR
|
|
Various from May to November 2016
|
|
Various from April to October 2018
|
|
U.S. Dollar to Malaysian Ringgit Exchange Rate
|
|
4.25 MYR
|
|
Designated
|
252.0 MXN
|
|
March 27, 2018
|
|
April 30, 2018
|
|
U.S. Dollar to Mexican Peso Exchange Rate
|
|
18.46 MXN
|
|
Not designated
|
2,443.3 MXN
|
|
Various from May 2016 to March 2018
|
|
Various from April 2018 to February 2020
|
|
U.S. Dollar to Mexican Peso Exchange Rate
|
|
20.29 MXN
|
|
Designated
|
30.2 GBP
|
|
Various from May 2016 to March 2018
|
|
Various from April 2018 to February 2020
|
|
British Pound Sterling to U.S. Dollar Exchange Rate
|
|
1.32 USD
|
|
Designated
|
Commodity
|
|
Notional
|
|
Remaining Contracted Periods
|
|
Weighted-Average Strike Price Per Unit
|
Silver
|
|
1,091,710 troy oz.
|
|
April 2018 - February 2020
|
|
$17.68
|
Gold
|
|
12,410 troy oz.
|
|
April 2018 - February 2020
|
|
$1,311.87
|
Nickel
|
|
274,872 pounds
|
|
April 2018 - February 2020
|
|
$5.18
|
Aluminum
|
|
5,552,122 pounds
|
|
April 2018 - February 2020
|
|
$0.92
|
Copper
|
|
7,407,223 pounds
|
|
April 2018 - February 2020
|
|
$2.87
|
Platinum
|
|
7,807 troy oz.
|
|
April 2018 - February 2020
|
|
$988.64
|
Palladium
|
|
1,967 troy oz.
|
|
April 2018 - February 2020
|
|
$877.97
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||
|
Balance Sheet Location
|
|
March 31, 2018
|
|
December 31, 2017
|
|
Balance Sheet Location
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
Prepaid expenses and other current assets
|
|
$
|
10,435
|
|
|
$
|
3,576
|
|
|
Accrued expenses and other current liabilities
|
|
$
|
37,636
|
|
|
$
|
32,806
|
|
Foreign currency forward contracts
|
Other assets
|
|
1,697
|
|
|
373
|
|
|
Other long-term liabilities
|
|
5,329
|
|
|
6,881
|
|
||||
Total
|
|
|
$
|
12,132
|
|
|
$
|
3,949
|
|
|
|
|
$
|
42,965
|
|
|
$
|
39,687
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity forward contracts
|
Prepaid expenses and other current assets
|
|
$
|
2,662
|
|
|
$
|
5,403
|
|
|
Accrued expenses and other current liabilities
|
|
$
|
1,600
|
|
|
$
|
1,006
|
|
Commodity forward contracts
|
Other assets
|
|
244
|
|
|
1,055
|
|
|
Other long-term liabilities
|
|
467
|
|
|
98
|
|
||||
Foreign currency forward contracts
|
Prepaid expenses and other current assets
|
|
458
|
|
|
6
|
|
|
Accrued expenses and other current liabilities
|
|
352
|
|
|
1,282
|
|
||||
Total
|
|
|
$
|
3,364
|
|
|
$
|
6,464
|
|
|
|
|
$
|
2,419
|
|
|
$
|
2,386
|
|
Derivatives designated as
hedging instruments
|
|
Amount of Deferred (Loss)/Gain Recognized in Other Comprehensive Loss
|
|
Location of Net (Loss)/Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income
|
|
Amount of Net (Loss)/Gain Reclassified from Accumulated Other Comprehensive Loss into Net Income
|
||||||||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
|
|
|
March 31, 2018
|
|
March 31, 2017
|
||||||||
Foreign currency forward contracts
|
|
$
|
(17,838
|
)
|
|
$
|
(13,311
|
)
|
|
Net revenue
|
|
$
|
(10,884
|
)
|
|
$
|
5,385
|
|
Foreign currency forward contracts
|
|
$
|
13,471
|
|
|
$
|
12,303
|
|
|
Cost of revenue
|
|
$
|
(826
|
)
|
|
$
|
(6,568
|
)
|
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Other, net
|
|
$
|
(1,376
|
)
|
|
$
|
—
|
|
Derivatives not designated as
hedging instruments
|
|
Amount of (Loss)/Gain Recognized in Net Income
|
|
Location of (Loss)/Gain Recognized in Net Income
|
||||||
|
|
March 31, 2018
|
|
March 31, 2017
|
|
|
||||
Commodity forward contracts
|
|
$
|
(3,195
|
)
|
|
$
|
5,440
|
|
|
Other, net
|
Foreign currency forward contracts
|
|
$
|
(4,950
|
)
|
|
$
|
(2,536
|
)
|
|
Other, net
|
|
For the three months ended
|
||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
Currency remeasurement gain on net monetary assets
|
$
|
6,748
|
|
|
$
|
2,191
|
|
Loss on foreign currency forward contracts
|
(6,326
|
)
|
|
(2,536
|
)
|
||
(Loss)/gain on commodity forward contracts
|
(3,195
|
)
|
|
5,440
|
|
||
Loss on debt financing
|
(2,350
|
)
|
|
—
|
|
||
Net periodic benefit cost, excluding service component
(1)
|
(298
|
)
|
|
(477
|
)
|
||
Other
|
788
|
|
|
101
|
|
||
Other, net
|
$
|
(4,633
|
)
|
|
$
|
4,719
|
|
(1)
|
On January 1, 2018, we adopted FASB ASU No. 2017-07, which requires the service cost component and other components of net periodic benefit cost to be presented separately on the consolidated statements of operations. Refer to Note 2, "New Accounting Standards," for additional details.
|
|
For the three months ended
|
||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||
Net revenue:
|
|
|
|
||||
Performance Sensing
|
$
|
662,829
|
|
|
$
|
600,143
|
|
Sensing Solutions
|
223,464
|
|
|
207,128
|
|
||
Total net revenue
|
$
|
886,293
|
|
|
$
|
807,271
|
|
Segment profit (as defined above):
|
|
|
|
||||
Performance Sensing
|
$
|
169,410
|
|
|
$
|
151,736
|
|
Sensing Solutions
|
71,884
|
|
|
67,438
|
|
||
Total segment profit
|
241,294
|
|
|
219,174
|
|
||
Corporate and other
|
(54,781
|
)
|
|
(46,240
|
)
|
||
Amortization of intangible assets
|
(35,069
|
)
|
|
(40,258
|
)
|
||
Restructuring and other charges, net
|
(3,766
|
)
|
|
(11,050
|
)
|
||
Profit from operations
|
147,678
|
|
|
121,626
|
|
||
Interest expense, net
|
(38,429
|
)
|
|
(40,277
|
)
|
||
Other, net
|
(4,633
|
)
|
|
4,719
|
|
||
Income before taxes
|
$
|
104,616
|
|
|
$
|
86,068
|
|
|
For the three months ended
|
||||
|
March 31,
2018 |
|
March 31,
2017 |
||
Basic weighted-average ordinary shares outstanding
|
171,404
|
|
|
170,947
|
|
Dilutive effect of stock options
|
926
|
|
|
567
|
|
Dilutive effect of unvested restricted securities
|
526
|
|
|
391
|
|
Diluted weighted-average ordinary shares outstanding
|
172,856
|
|
|
171,905
|
|
|
For the three months ended
|
||||
|
March 31,
2018 |
|
March 31,
2017 |
||
Anti-dilutive shares excluded
|
709
|
|
|
1,280
|
|
Contingently issuable shares excluded
|
787
|
|
|
517
|
|
|
|
For the three months ended March 31, 2018
|
||||||||||
|
|
Performance Sensing
|
|
Sensing Solutions
|
|
Total
|
||||||
Automotive
|
|
$
|
529,793
|
|
|
$
|
13,856
|
|
|
$
|
543,649
|
|
HVOR
|
|
133,036
|
|
|
—
|
|
|
133,036
|
|
|||
Appliance and HVAC
|
|
—
|
|
|
54,317
|
|
|
54,317
|
|
|||
Industrial
|
|
—
|
|
|
82,385
|
|
|
82,385
|
|
|||
Aerospace
|
|
—
|
|
|
41,706
|
|
|
41,706
|
|
|||
Other
|
|
—
|
|
|
31,200
|
|
|
31,200
|
|
|||
Total
|
|
$
|
662,829
|
|
|
$
|
223,464
|
|
|
$
|
886,293
|
|
•
|
instability and changes in the global markets, including regulatory, political, economic, and military matters;
|
•
|
changes to current policies, such as trade tariffs, by the U.S. government;
|
•
|
adverse conditions in the automotive industry;
|
•
|
competition in our industry;
|
•
|
pressure from customers to reduce prices;
|
•
|
supplier interruption or non-performance limiting our access to manufactured components or raw materials;
|
•
|
business disruptions due to natural disasters or other disasters outside our control;
|
•
|
labor disruptions or increased labor costs;
|
•
|
difficulties or failures to integrate businesses we acquire;
|
•
|
disruptions from any future acquisitions dispositions, joint ventures, collaborative arrangements, or other investments that either require significant resources, result in significant unanticipated losses, costs, or liabilities, or a combination thereof;
|
•
|
market acceptance of new product introductions and product innovations;
|
•
|
changes to, or our inability to comply with, various regulations, including tax laws, import/export regulations, anti-bribery laws, environmental and safety laws, and other governmental regulations;
|
•
|
foreign currency risks, changes in socio-economic conditions, or changes to monetary and fiscal policies, including as a result of the impending exit of the U.K. from the European Union;
|
•
|
losses and costs as a result of intellectual property, product liability, warranty, and recall claims that may be brought against us;
|
•
|
taxing authorities challenging our historical and future tax positions or our allocation of taxable income among our subsidiaries;
|
•
|
our level of indebtedness, or our inability to meet debt service obligations or comply with the covenants contained in the credit agreement and indentures; and
|
•
|
security breaches and other disruptions to our information technology infrastructure.
|
|
For the three months ended
|
||||||||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||||||||
($ in millions)
|
Amount
|
|
Percent of Net
Revenue
|
|
Amount
|
|
Percent of Net
Revenue
|
||||||
Net revenue:
|
|
|
|
|
|
|
|
||||||
Performance Sensing
|
$
|
662.8
|
|
|
74.8
|
%
|
|
$
|
600.1
|
|
|
74.3
|
%
|
Sensing Solutions
|
223.5
|
|
|
25.2
|
|
|
207.1
|
|
|
25.7
|
|
||
Net revenue
|
886.3
|
|
|
100.0
|
|
|
807.3
|
|
|
100.0
|
|
||
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||
Cost of revenue
|
582.5
|
|
|
65.7
|
|
|
532.4
|
|
|
66.0
|
|
||
Research and development
|
36.0
|
|
|
4.1
|
|
|
31.8
|
|
|
3.9
|
|
||
Selling, general and administrative
|
81.3
|
|
|
9.2
|
|
|
70.1
|
|
|
8.7
|
|
||
Amortization of intangible assets
|
35.1
|
|
|
4.0
|
|
|
40.3
|
|
|
5.0
|
|
||
Restructuring and other charges, net
|
3.8
|
|
|
0.4
|
|
|
11.1
|
|
|
1.4
|
|
||
Total operating costs and expenses
|
738.6
|
|
|
83.3
|
|
|
685.6
|
|
|
84.9
|
|
||
Profit from operations
|
147.7
|
|
|
16.7
|
|
|
121.6
|
|
|
15.1
|
|
||
Interest expense, net
|
(38.4
|
)
|
|
(4.3
|
)
|
|
(40.3
|
)
|
|
(5.0
|
)
|
||
Other, net
|
(4.6
|
)
|
|
(0.5
|
)
|
|
4.7
|
|
|
0.6
|
|
||
Income before taxes
|
104.6
|
|
|
11.8
|
|
|
86.1
|
|
|
10.7
|
|
||
Provision for income taxes
|
14.1
|
|
|
1.6
|
|
|
14.3
|
|
|
1.8
|
|
||
Net income
|
$
|
90.5
|
|
|
10.2
|
%
|
|
$
|
71.7
|
|
|
8.9
|
%
|
|
For the three months ended
|
||||||
(in millions)
|
March 31, 2018
|
|
March 31, 2017
|
||||
Net cash provided by/(used in):
|
|
|
|
||||
Operating activities:
|
|
|
|
||||
Net income adjusted for non-cash items
|
$
|
172.1
|
|
|
$
|
152.1
|
|
Changes in operating assets and liabilities, net of effects of acquisitions
|
(48.9
|
)
|
|
(32.4
|
)
|
||
Operating activities
|
123.3
|
|
|
119.7
|
|
||
Investing activities
|
(30.9
|
)
|
|
(30.1
|
)
|
||
Financing activities
|
(17.1
|
)
|
|
(9.3
|
)
|
||
Net change
|
$
|
75.2
|
|
|
$
|
80.3
|
|
(in thousands)
|
Maturity Date
|
|
March 31, 2018
|
||
Term Loan
|
October 14, 2021
|
|
$
|
917,794
|
|
4.875% Senior Notes
|
October 15, 2023
|
|
500,000
|
|
|
5.625% Senior Notes
|
November 1, 2024
|
|
400,000
|
|
|
5.0% Senior Notes
|
October 1, 2025
|
|
700,000
|
|
|
6.25% Senior Notes
|
February 15, 2026
|
|
750,000
|
|
|
Less: discount
|
|
|
(17,233
|
)
|
|
Less: deferred financing costs
|
|
|
(26,607
|
)
|
|
Less: current portion
|
|
|
(2,278
|
)
|
|
Long-term debt, net
|
|
|
$
|
3,221,676
|
|
|
|
|
|
||
Capital lease and other financing obligations
|
|
|
$
|
33,635
|
|
Less: current portion
|
|
|
(5,900
|
)
|
|
Capital lease and other financing obligations, less current portion
|
|
|
$
|
27,735
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Item 3.
|
Defaults Upon Senior Securities.
|
Item 6.
|
Exhibits.
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
|
2.1
|
|
|
|
|
|
3.1
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
101
|
|
The following materials from the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.
|
|
|
|
/s/ Martha Sullivan
|
(Martha Sullivan)
President and Chief Executive Officer
(Principal Executive Officer)
|
|
/s/ Paul Vasington
|
(Paul Vasington)
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
1.
|
Duties
|
1.1
|
Mr. Chawla is appointed as managing director of the Company. He also holds the function “Senior Vice President”.
|
1.2
|
In addition, Mr. Chawla also acts as statutory representative (managing director) of Sensata Technologies Holland BV.
|
1.3
|
The Managing Director shall perform his duties in accordance with the law, the Articles of Association of the Company, the Management Rules of the Company and the directions of the competent Company bodies, in particular any instructions given by the shareholders’ meeting, as well as in accordance with this Managing Director Service Agreement, but otherwise independently and on his own authority.
|
1.4
|
The Managing Director reports to the Executive Vice President, Performance Sensing and Chief Technology Officer of Sensata Technologies Inc. or such other person designated by the Company’s shareholders’ meeting.
|
1.5
|
The managing Director represents the Company in court and out of court. Vis-à-vis the employees he shall take up the rights and obligations as employer on behalf of the Company in the sense of the employment and social law regulations.
|
1.6
|
The Company may at any time appoint additional managing directors, remove managing directors from office, change both the power of attorney and the power of management of all or of individual managing directors, or reorganize the internal allocation of responsibilities among the managing directors.
|
1.7
|
The Managing Director shall without any additional remuneration also accept positions or offices in companies affiliated with the Company (sec. 15 of the German Stock Companies Act (Aktiengesetz, AktG)).
|
1.8
|
With a view to such positions and services, the regulations of this Managing Director Service Agreement shall apply analogously, unless agreed otherwise in writing. Moreover, the Managing Director shall comply with the provisions under the Articles of Association of the respective company as well as its rules of procedure in case such exist and any instructions given by the shareholders’ meeting or any other competent company body as set out in the Articles of Association of the Company.
|
1.9
|
Upon the Company’s request, the Managing Director shall also accept positions or offices in associations and professional or other organizations of which the Company or an affiliated company is a member. The Managing Director shall transfer to the Company any remuneration or allowances he receives from third parties in this respect. Upon the Company’s request, the Managing Director shall resign from any position or office accepted and/or he shall do his utmost to ensure that the persons nominated by the Company shall succeed him in the positions or offices.
|
1.10
|
The Company reserves the right to assign to the Managing Director at any time any equivalent area of work or responsibility within the board of managers in consideration of his abilities and qualifications.
|
2.
|
Business Actions Requiring Approval
|
3.
|
Scope and Place of Service
|
3.1
|
The Managing Director shall devote all his working capacity, knowledge and skills into the services of the Company as well as of company/companies mentioned in ciph. 1.7, respectively affiliated companies of the Company, if appropriate.
|
3.2
|
He shall be able to schedule his working hours subject to business requirements.
|
3.3
|
The Managing Director’s place of service is the seat of the Company in Dusseldorf.
|
4.
|
Side and other Activities
|
5.
|
Remuneration
|
5.1
|
The Managing Director shall receive an annual fixed salary in the gross amount of EUR 244,444.44 payable in twelve (12) installments of EUR 20,370.37.
|
5.2
|
The fixed salary as stipulated in ciph. 5.1 hereinabove shall be annually - prior to the start of the new business year - reviewed and adjusted at the Company’s discretion by the shareholders’ meeting subject to the economic situation of the Company, the Managing Director’s performance as well as the regular depreciation of money.
|
5.3
|
The fixed salary as agreed in ciph. 5.1 also compensates for any activities of the Managing Director outside the usual working hours.
|
5.4
|
The Managing Director is entitled to participate in the Company’s Executive Bonus Plan, according to which the claim for the payment of a bonus depends on the Company’s and individual performance. It is intended to define a target bonus of 65% of the annual base gross salary stipulated in ciph. 5.1, vacation and Christmas allowance in ciph. 5.7 given a target achievement of 100%.
|
5.5
|
The Managing Director is eligible to participate in the Company’s Equity Incentive Plan, which will be specified by annual goal settings, with metrics and pay out scale provided. Details of the Company’s Equity Incentive Plan are outlined in the company policy “Long Term Incentive Compensation”.
|
5.6
|
The Company pays the employer’s social security contributions as far as the Managing Director is subject to the mandatory social security contributions. The Company grants the Managing Director - in case he agreed to a private health insurance - a contribution to the private health insurance in the amount of the employer’s contribution applicable in case of the statutory health insurance. The amount is limited to half of the total amount the Managing Director expends for the private health insurance. Moreover, the contribution shall be limited as applicable in accordance with the statutory health insurance and other employer’s contribution under the Social Security Code Vol. 5 (Funftes Sozialgesetzbuch).
|
5.7
|
In order to reward company loyalty (Betriebstreue) and as an incentive for future company loyalty, the Managing Director is entitled to vacation allowance amounting to 50% of his gross monthly fixed salary once a calendar year, which can be calculated based on ciph. 5.1., currently EUR 10,185.19 gross. The vacation allowance will be paid together with the June salary.
|
5.8
|
No fringe benefits or allowances shall be paid to the Managing Director other than expressly provided for under
|
5.9
|
Possible payments of bonuses, premiums, fringe benefits or any other allowances not provided expressly in this Managing Director Service Agreement shall be made voluntarily only. Even repeated payments of such benefits shall not confer any right or claim for continued payment thereof in future.
|
5.10
|
The Company reimburses the real expenses of the Managing Director for tuition of his children up to a total maximum of EUR 60,000.00 per school year for the school years 2016-2017, 2017-2018, and 2018-2019 in so far as these expenses can be proved by receipts and invoices.
|
6.
|
Mobile Phone/Laptop
|
7.
|
Remuneration in the Event of Incapacity
|
7.1
|
In each case of unforeseen absence from the Company, the Managing Director shall inform the Company thereof without undue delay as well as of the reason and the probable duration of his absence. The Managing Director shall simultaneously draw the Company’s attention to any pressing tasks which need to be dealt with urgently.
|
7.2
|
Should inability to work due to sickness or accident last longer than three calendar days, the Managing Director shall submit a medical certificate regarding his inability to work and stating the probable duration of such condition by no later than the working day following the third calendar day. The Company is entitled to demand submission of the certificate of inability to work at an earlier date.
|
7.3
|
In the case of temporary incapacity of the Managing Director to provide services due to illness or any other reason beyond his control, the Company shall continue to pay the Managing Director the remuneration hereunder for six (6) weeks, provided that this Managing Director Service Agreement does not end earlier.
|
8.
|
Reimbursement of Expenses
|
9.
|
Company Car
|
9.1
|
For business purposes, the Company shall make available to the Managing Director a Company car (Audi A7, 3.0TDII, gross monthly leasing rate EUR 1,239.11 or equivalent car class and leasing price, 40,000km/per year). The respective costs (tax, insurance, gas, service fees, etc.) shall be borne by the Company.
|
9.2
|
The Managing Director may use the company car for private purposes. He shall bear the taxes on the private use.
|
9.3
|
The Managing Director is obliged to take care of the company car and is responsible for the proper use of the company car. He is obliged to ensure that the company car is kept in an operational and roadworthy condition. Outstanding inspections are to be initiated immediately.
|
9.4
|
The supply of the company car to a third party within the scope of the right of private use is prohibited, This does not apply to the Managing Director’s wife and children living in the Managing Director’s home, provided they hold the relevant driver’s license.
|
9.5
|
The Company reserves the right to unilaterally revoke the right to use the company car for both business and private purposes at its reasonably exercised discretion for factual reasons with ten (10) days’ notice, at the earliest, however, upon expiry of the current month. Factual reasons are in particular:
|
i.
|
irrevocable release from the obligation to perform work, particularly after termination of the Managing Director’s Service Agreement,
|
ii.
|
inability to work due to illness for a period exceeding 6 weeks,
|
iii.
|
suspension of the Managing Director’s Service Relationship for other reasons,
|
iv.
|
suspension or withdrawal of the driving license or if a ban or driving a vehicle is imposed,
|
v.
|
if the Managing Director undertakes a new position within the Company for the exercise of which a company car is not required.
|
9.6
|
In case of termination of this Managing Director Service Agreement, the Managing Director shall return the company car at the Company’s seat at the termination date in proper condition and with all documents and keys. Any right of retention is excluded.
|
9.7
|
Apart from and notwithstanding afore regulations, the provisions under the Company’s company car policy 10026 shall apply.
|
10.
|
Company Pension
|
11.
|
Group Accident Insurance
|
12.
|
Travel Insurance
|
13.
|
Vacation
|
13.1
|
The Managing Director is entitled to an annual vacation of 30 working days.
|
13.2
|
He shall schedule this vacation after consultation with any co-managing directors or the competent Company bodies taking the interests of the Company into consideration.
|
13.3
|
Vacation not taken within three months after the end of ta calendar year shall be forfeited without any right of compensation unless otherwise agreed in writing.
|
14.
|
Secrecy
|
14.1
|
The Managing Director is obliged to maintain strict confidentiality with regard to all confidential matters, notably trade and business secrets of the Company and its associated companies in the sense of §18 Public Companies Act (Aktiengesetz, AktG) as well as any other commercial, financial or technical information relating to the business of the Company, of any associated company or of any contractual partner of the Company. He will not disclose these confidential matters to any third person by whatever way or medium. Furthermore, the
|
14.2
|
All documents relating to the Company or its associated companies, notably all notes, specifications for quotations and/or contracts, drawings, minutes, reports, correspondence and similar documents (as well as all copies or other reproductions thereof, including in electronic form), and items (e.g. mobile phone, laptop, identity cards, etc.) and data carriers/data with which the Managing Director has been provided for work purposes must be handled with care. They may be used, copied or removed from Company premises other than for business purposes only with the Company’s prior written consent.
|
14.3
|
The Managing Director shall, without prior solicitation upon termination of the Managing Director Contract or in the event of an irrevocable release from the working activities, and upon request during the term of the Managing Director Service Agreement, return to the Company all documents, items and data carriers in his possession which are specified in ciph. 14.2. The same applies analogously to nonphysical information and materials such as computer programs or other data. The Managing Director is not permitted to retain backup copies.
|
14.4
|
The Managing Director acknowledges that the items, documents and data carriers/data specified in ciph. 14.2 and 14.3 are in the sole property of the Company or its associated companies. The Managing Director has no right of retention.
|
14.5
|
The Managing Director shall, without prior solicitation upon termination of the Managing Director Service Agreement or in the event of an irrevocable release from the working activities, and upon request during the term of the Management Director Service Agreement, inform the Company about all passwords, write protect codes and access codes or similar codes to all computers, laptops, mobile phones and other devices of the Company used by the Managing Director for business purposes. The Managing Director has no right of retention.
|
15.
|
Contractual Prohibition of Competition
|
16.
|
Term and Termination of the Service Agreement and of the Office
|
16.1
|
This Managing Director Service Agreement shall become effective as of December 1, 2016 and is concluded for an unlimited term.
|
16.2
|
This Managing Director Service Agreement can be terminated by either Party by giving notice with a notice period of one (1) months with effect as of the end of any calendar month.
|
16.3
|
The termination of this Managing Director Service Agreement must be made in writing.
|
16.4
|
This Managing Director Service Agreement shall be terminated at the latest and automatically by the end of the month, in which the Managing Director will reach the statutory retirement age. If it is determined by decision of the pension insurance provider that the Managing Director is occupationally disabled or unfit for gainful services, the Managing Director’s service relationship shall end upon the expiration of the month in which the decision is delivered.
|
16.5
|
Upon termination of this Managing Director Service Agreement, regardless of the identity of the terminating Party, the Company shall be entitled to release the Managing Director from his duties with immediate effect revocable or irrevocable subject to continued payment of the fixed contractual remuneration.
|
16.6
|
The right to terminate without notice for good cause remains unaffected.
|
16.7
|
The Company may at any time remove the Managing Director form his office as Managing Director.
|
16.8
|
Upon removal from his Managing Director office, the Managing Director shall not be entitled nor, except for transitional activities, be required to render services or other activities for the Company. The other duties of the Parties, including loyalty obligations and the approval requirement with respect to side and other activities, remain unaffected.
|
17.
|
Severance Pay on Termination, Condition for Severance Pay
|
17.1
|
In the event of termination of the Managing Director Service Agreement at the request of the Company to which the Managing Director has not given any reason, he shall receive a severance payment (“
Severance Payment
”)
provided that the following condition is fulfilled
:
|
17.2
|
If and to the extend the Managing Director would be entitled to any (statutory) severance pay and/or compensation with regard to his activities as statutory representative (managing director) of Sensata Technologies Holland BV, this (statutory) severance pay and/or compensation will be deemed to be incorporated in the potential Severance Payment according to ciph. 17.1. The Severance Payment under ciph. 17.1 will not be increased by additional payments.
|
17.3
|
The Managing Director will not be entitled to the Severance Payment according to ciph.17.1 in case the Managing Director Service Agreement ends due to (early) retirement.
|
18.
|
Forfeiture of Claims, Statute of Limitations
|
18.1
|
All claims of the Parties arising under with the Managing Director Service Agreement shall be deemed forfeited unless they are asserted in accordance with §126 b BGB (e.g. letter, email, fax) vis-à-vis the other Party within three months after falling due. This shall not apply to liability for intent and liability based on criminal offense or tort.
|
18.2
|
The above also rules for all claims in connection with the Managing Director Service Agreement.
|
18.3
|
The regular limitation period for all claims by the Parties arising under or in connection with this employment shall be one year. The afore limitation period shall not apply to liability for intent and liability based on criminal offense or tort. The statutory regulations governing the expiry of the limitation period shall not be affected.
|
19.
|
Miscellaneous
|
19.1
|
This Managing Director Service Agreement constitutes the entire understanding between the Parties. There are no ancillary agreements.
|
19.2
|
Changes and/or amendments to this Managing Director Service Agreement including this provision require written form to be valid.
|
19.3
|
Claims under and in connection with this Managing Director Service Agreement may not be brought in summary proceedings (Urkundsprozess).
|
19.4
|
Should any provision of this Managing Director Service Agreement and/or of amendments thereof or supplements be or become invalid in whole or in part, this shall not affect the validity of the remaining provisions of this. In such case, the Parties are obliged to negotiate a valid and reasonable substituting regulation, which most closely approximates the intended economic result of the invalid provision. The same shall apply for any gap in this Managing Director Service Agreement.
|
19.5
|
Place of performance and place of jurisdiction shall be determined in line with statutory provisions.
|
19.6
|
This Managing Director Service Agreement shall be governed by German law.
|
19.7
|
The German version of this Managing Director Service Agreement shall prevail.
|
/s/
|
Gerrit H. Ensing
|
/s/
|
Paul Chawla
|
|
Amendment on the Managing Director Service Agreement dated January 26, 2017
|
|
between
|
|
Sensata Technologies Germany GmbH,
represented by the shareholders’ meeting, this in return represented by Mr. Gerrit H. Ensing, Johannstraße 37, 40476 Dusseldorf, Germany hereinafter referred to as the “Company “ - and Mr. Paul Chawla, Sonnenacker 54, 40489 Dusseldorf, Germany - hereinafter referred to as the "Managing Director"- - together referred to as "The Parties"- |
|
It is agreed as follows:
|
|
§ 1 Duties
|
(a)
|
Changes regarding Nr. 1.2 of the Managing Director Service Agreement:
The Parties agree that the Managing Director stays appointed as managing director of the Company. He also holds the function “Senior Vice President Performance Sensing Auto, Sensata Technologies, Inc.” but will not act any longer as statutory representative (managing director) of Sensata Technologies Holland BV (see Nr. 1.1 and Nr. 1.7 of his managing director agreement) and the Managing Director will have no longer an assignment agreement with Sensata Technologies Holland BV.
|
(b)
|
Nr. 1.4 of the Managing Director Service Agreement is changed as follows:
"The Managing Director reports to the President & Chief Executive Officer of Sensata Technologies Inc. or such other person designated by the Company’s shareholders’ meeting."
|
|
§ 2 Remuneration
|
(a)
|
Nr. 5.1 of the Managing Director Service Agreement is changed as follows:
"The Managing Director shall receive an annual fixed salary in the gross amount of EUR 354,556.00 payable in 13,5 instalments (this includes the Christmas allowances and the vacation allowances according to Nr. 5.7 of this Managing Director Agreement."
|
(b)
|
Regarding Nr. 5.7 of the Managing Director Service Agreement it is clarified that the Christmas allowances is currently paid in the gross amount of EUR 26,263.41 and the vacation allowances in the gross amount of EUR 13,131.70. The conditions of payment remain unchanged.
|
(c)
|
Nr. 5.3 of the Managing Director Service Agreement is changed as follows:
"The fixed salary as agreed also compensates for any activities of the Managing Director outside the usual working hours."
|
(d)
|
Nr. 5.4 of the Managing Director Service Agreement is changed as follows:
"The Managing Director is eligible to participate in the Company Executive Bonus Plan with a target of 75% of the annual fixed salary. Actual payout will vary depending upon company and Senior Leadership Scorecard Performance.
Further details are provided in the Executive Bonus Plan and will be determined by the annual goal setting, with metrics and pay out scale provided."
|
(e)
|
Nr. 5.5 of the Managing Director Service Agreement is changed as follows:
"The Managing Director is eligible to participate in the Company’s Equity Incentive Plan. The target long term incentive award 2018 will be $750,000.00. Actual award granted will vary depending on company and individual performance. All long-term incentive awards are subject to approval of the Board of the Directors of Sensata Technologies Holding, N.V."
|
(f)
|
The Parties agree that the Managing Director is not eligible for any other bonus plan or long equity plan as mentioned in this amendment.
|
|
§ 3 Assignment
|
|
The Assignment Agreement to assign the Managing Director to Sensata Technologies Holland BV, Jan Tinbergenstraat 80, 7559 SP Hengelo, The Netherlands is terminated with immediate effect.
|
|
§ 4 Final provisions, Language
|
(a)
|
The rest of the Managing Director Service Agreement remains unaffected.
|
(b)
|
This amendment to the Managing Director Service Agreement constitutes the entire understanding between the Parties. There are no ancillary agreements. Changes and/or amendments to this amendment to the Managing Director Service Agreement including this provision require written form to be valid. This shall also apply to addition to the written form requirement itself. Individual agreements always take precedence and apply regardless of the written form requirement (section 305 b of the German Civil Code (BGB)).
|
(c)
|
Should any provision of this amendment to the Managing Director Service Agreement be or become invalid in whole or in part, this shall not affect the validity of the remaining provisions of this. In such case, the Parties are obliged to negotiate a valid and reasonable substituting regulation, which most closely approximates the intended economic result of the invalid provision. The same shall apply for any gap in this amendment to the Managing Director Service Agreement.
|
(d)
|
The German version of this amendment to the Managing Director Service Agreement shall prevail. The Parties agree that amendments to this agreement and further amendments to the Managing Director Service Agreement can be concluded in English as well.
|
/s/ Martha Sullivan
|
Martha Sullivan
President and Chief Executive Officer
|
/s/ Paul Vasington
|
Paul Vasington
Executive Vice President and Chief Financial Officer
|
|
|
/s/ Martha Sullivan
|
|
|
Martha Sullivan
President and Chief Executive Officer
|
|
Date:
|
April 24, 2018
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/s/ Paul Vasington
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Paul Vasington
Executive Vice President and Chief Financial Officer |
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Date:
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April 24, 2018
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