10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 001-34652

SENSATA TECHNOLOGIES HOLDING N.V.

(Exact Name of Registrant as Specified in Its Charter)

THE NETHERLANDS	98-0641254
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Kolthofsingel 8, 7602 EM Almelo The Netherlands	31-546-879-555
(Address of Principal Executive Offices, including Zip Code)	(Registrant’s Telephone Number, Including Area Code)

Former name, former address and former fiscal year, if changed since last report.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨    No  x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer  ¨	Accelerated filer	¨
Non-accelerated filer    x (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares outstanding of each of the issuer’s classes of common stock, as of April 20, 2010 was 171,079,824.

TABLE OF CONTENTS

PART I
	Item 1.	Financial Statements (unaudited):
		Condensed Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009	4
		Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and March 31, 2009	5
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and March 31, 2009	6
		Notes to Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
	Item 4.	Controls and Procedures	47
PART II
	Item 1.	Legal Proceedings	48
	Item 1A.	Risk Factors	48
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
	Item 3.	Defaults Upon Senior Securities	49
	Item 5.	Other Information	49
	Item 6.	Exhibits	49

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains forward-looking statements within the meaning of the federal securities laws. These statements relate to analyses and other information, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies.

These forward looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “should”, “estimate”, “expect”, “intend”, “may”, “will”, “plan”, “predict”, “project”, and similar terms and phrases or the negative of such terms and phrases, including references to assumptions. However, these words are not the exclusive means of identifying such statements. These statements are contained in many sections of this report, including “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations.

We believe that the following factors, among others (including those described in “Item 1A. Risk Factors” caption in the “Part II—Other Information” section of this report), could affect our future performance and the liquidity and value of our securities and cause our actual results to differ materially from those expressed or implied by forward-looking statements made by us or on our behalf: risks associated with the continued weakness in worldwide economic conditions; adverse developments in the automotive industry; continued fundamental changes in the industries in which we operate, including economic declines that impact the sales of any of the products manufactured by our customers that use our sensors or controls; fluctuations in the cost and/or availability of manufactured components and raw materials; non-performance by our suppliers; competition in our markets; continued pricing and other pressures from our customers; general economic, political, business and market risks; fluctuations in foreign currency exchange and interest rates; risks associated with our ability to comply with our debt covenants, including financial ratios; risks associated with our substantial indebtedness, leverage and debt service obligations; litigation and disputes involving us, including the extent of product liability and warranty claims asserted against us; our ability to realize revenue or achieve anticipated gross operating margins from products subject to existing customer awards; labor costs and disputes; our dependence on third parties for certain transportation, warehousing and logistics services; material disruptions at any of our manufacturing facilities; our ability to develop and implement technology in our product lines; our ability to protect our intellectual property and know-how; our exposure to claims that our products or processes infringe on the intellectual property rights of others; the costs of compliance with various laws affecting our operations, including environmental, health and safety laws and export controls and responding to potential liabilities under these laws; our ability to attract and retain key personnel; risks associated with future acquisitions, joint ventures or asset dispositions, as well as risks associated with integration of acquired companies; risks associated with maintaining internal control over financial reporting in compliance with Section 404 of the Sarbanes-Oxley Act of 2002; our ability to recover damages related to possible disputes covered by the indemnification agreement with Texas Instruments Incorporated; and the possibility that our principal shareholder’s interests will conflict with our interests or the interests of our stakeholders.

There may be other factors that may cause our actual results to differ materially from the forward-looking statements. Our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. You should carefully read the factors described in the “Risk Factors” section of this report and our Prospectus on Form 424(b)(4) filed with the Securities and Exchange Commission on March 11, 2010 for a description of certain risks that could, among other things, cause our actual results to differ from these forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement, and we undertake no obligation to revise or update this Quarterly Report on Form 10-Q to reflect events or circumstances after the date hereof.

3

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

SENSATA TECHNOLOGIES HOLDING N.V.

Condensed Consolidated Balance Sheets

(Thousands of U.S. dollars, except share and per share amounts)

(unaudited)

	March 31, 2010			December 31, 2009
Assets
Current assets:
Cash and cash equivalents	$	508,247		$	148,468
Accounts receivable, net of allowances of $11,066 and $12,739 as of March 31, 2010 and December 31, 2009, respectively		208,347			180,839
Inventories		132,849			125,375
Deferred income tax assets		12,458			12,419
Prepaid expenses and other current assets		22,231			19,627
Assets held for sale		238			238
Total current assets		884,370			486,966
Property, plant and equipment at cost		404,018			400,461
Accumulated depreciation		(190,652	)		(180,523	)
Property, plant and equipment, net		213,366			219,938
Goodwill		1,530,506			1,530,570
Other intangible assets, net		830,521			865,531
Deferred income tax assets		5,573			5,543
Deferred financing costs		36,973			41,147
Other assets		18,922			17,175
Total assets	$	3,520,231		$	3,166,870
Liabilities and shareholders’ equity
Current liabilities:
Current portion of long-term debt, capital lease and other financing obligations	$	245,709		$	17,139
Accounts payable		131,328			122,834
Income taxes payable		7,177			8,384
Accrued expenses and other current liabilities		105,948			91,741
Accrued profit sharing		596			600
Deferred income tax liabilities		739			823
Total current liabilities		491,497			241,521
Deferred income tax liabilities		173,139			165,477
Pension and post-retirement benefit obligations		48,786			49,525
Capital lease and other financing obligations, less current portion		39,981			40,001
Long-term debt, less current portion		1,856,595			2,243,686
Other long-term liabilities		38,378			39,502
Commitments and contingencies
Total liabilities		2,648,376			2,779,712
Shareholders’ equity:
Ordinary shares, €0.01 nominal value per share, 400,000,000 shares authorized; 170,738,332 and 144,068,541 shares issued as of March 31, 2010 and December 31, 2009, respectively		2,187			1,825
Treasury shares, at cost, 11,973 shares as of March 31, 2010 and December 31, 2009		(136	)		(136	)
Due from parent		(17	)		(17	)
Additional paid-in capital		1,506,012			1,050,373
Accumulated deficit		(600,378	)		(627,688	)
Accumulated other comprehensive loss		(35,813	)		(37,199	)
Total shareholders’ equity		871,855			387,158
Total liabilities and shareholders’ equity	$	3,520,231		$	3,166,870

The accompanying notes are an integral part of these condensed consolidated financial statements

4

SENSATA TECHNOLOGIES HOLDING N.V.

Condensed Consolidated Statements of Operations

(Thousands of U.S. dollars, except share and per share amounts)

(unaudited)

	For the three months ended
	March 31, 2010			March 31, 2009
Net revenue	$	377,137		$	239,016
Operating costs and expenses:
Cost of revenue		232,783			161,344
Research and development		4,930			5,163
Selling, general and administrative		77,891			31,629
Amortization of intangible assets and capitalized software		36,136			38,804
Impairment of goodwill and intangible assets		—			19,867
Restructuring		699			11,488
Total operating costs and expenses		352,439			268,295
Profit/(loss) from operations		24,698			(29,279	)
Interest expense		(33,516	)		(42,484	)
Interest income		139			324
Currency translation gain and other, net		47,185			69,142
Income/(loss) from continuing operations before taxes		38,506			(2,297	)
Provision for income taxes		11,196			7,641
Income/(loss) from continuing operations		27,310			(9,938	)
Loss from discontinued operations, net of tax of $0		—			(261	)
Net income/(loss)	$	27,310		$	(10,199	)
Net income/(loss) per share (Note 4):
Income/(loss) per share from continuing operations—basic	$	0.18		$	(0.07	)
Income/(loss) per share from continuing operations—diluted	$	0.17		$	(0.07	)
Net income/(loss) per share—basic	$	0.18		$	(0.07	)
Net income/(loss) per share—diluted	$	0.17		$	(0.07	)
Weighted-average ordinary shares outstanding—basic		150,211,136			144,056,568
Weighted-average ordinary shares outstanding—diluted		156,696,051			144,056,568

The accompanying notes are an integral part of these condensed consolidated financial statements

5

SENSATA TECHNOLOGIES HOLDING N.V.

Condensed Consolidated Statements of Cash Flows

(Thousands of U.S. dollars)

(unaudited)

	For the three months ended
	March 31, 2010			March 31, 2009
Cash flows from operating activities:
Net income/(loss)	$	27,310		$	(10,199	)
Net loss from discontinued operations		—			(261	)
Net income/(loss) from continuing operations		27,310			(9,938	)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Depreciation		10,804			11,072
Amortization of deferred financing costs		2,293			2,383
Currency translation gain on debt		(60,116	)		(68,955	)
Loss on repurchase of outstanding Senior and Senior Subordinated Notes		8,098			—
Share-based compensation		20,064			201
Amortization of intangible assets and capitalized software		36,136			38,804
(Gain)/loss on disposition of assets		(135	)		83
Deferred income taxes		7,509			7,017
Impairment of goodwill and intangible assets		—			19,867
Increase/(decrease) from changes in operating assets and liabilities:
Accounts receivable, net		(27,508	)		(1,750	)
Inventories		(7,474	)		24,095
Prepaid expenses and other current assets		(379	)		10,846
Accounts payable and accrued expenses		18,038			34,030
Income taxes payable		(1,207	)		(4,104	)
Accrued profit sharing and retirement		(526	)		(1,134	)
Other		2,688			468
Net cash provided by operating activities from continuing operations		35,595			62,985
Net cash used in operating activities from discontinued operations		—			(233	)
Net cash provided by operating activities		35,595			62,752
Cash flows from investing activities:
Additions to property, plant and equipment and capitalized software		(5,684	)		(4,319	)
Proceeds from sale of assets		232			—
Net cash used in investing activities		(5,452	)		(4,319	)
Cash flows from financing activities:
Advances to shareholder		—			(19	)
Proceeds from issuance of ordinary shares		433,423			—
Proceeds from exercise of stock options		2,514			—
Proceeds from revolving credit facility, net		—			48,250
Payments on U.S. term loan facility		(2,375	)		(2,375	)
Payments on Euro term loan facility		(1,342	)		(1,313	)
Payments on repurchase of outstanding Senior and Senior Subordinated Notes		(102,105	)		—
Payments on capitalized lease and other financing obligations		(479	)		(408	)
Net cash provided by financing activities		329,636			44,135
Net change in cash and cash equivalents		359,779			102,568
Cash and cash equivalents, beginning of period		148,468			77,716
Cash and cash equivalents, end of period	$	508,247		$	180,284

The accompanying notes are an integral part of these condensed consolidated financial statements

6

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

1. The Company

The accompanying unaudited condensed consolidated financial statements presented herein reflect the financial position, results of operations and cash flows of Sensata Technologies Holding N.V. (“Sensata Technologies Holding”) and its wholly-owned subsidiaries, including Sensata Technologies Intermediate Holding B.V. (“Sensata Intermediate Holding”) and Sensata Technologies B.V. (“STBV”), collectively referred to as the “Company”. Sensata Technologies Holding is a majority-owned subsidiary of Sensata Investment Company SCA (the “Parent”). The share capital of the Parent is 100% owned by entities associated with Bain Capital Partners, LLC (“Bain Capital”), a leading global private investment firm, co-investors (Bain Capital and co-investors are collectively referred to as the “Sponsors”) and certain members of the Company’s senior management.

On April 27, 2006 (inception), investment funds associated with the Sponsors completed the acquisition of the Sensors and Controls business (“S&C”) of Texas Instruments Incorporated (“TI”) for aggregate consideration of $3.0 billion in cash and transaction fees and expenses of $31.4 million (the “2006 Acquisition”). The 2006 Acquisition was financed by a cash investment from the Sponsors of approximately $985.0 million and the issuance of approximately $2.1 billion of indebtedness.

On March 16, 2010, Sensata Technologies Holding completed the initial public offering (“IPO”) of its ordinary shares in which it sold 26,315,789 shares and its existing shareholders and certain employees sold 5,284,211 shares at a public offering price of $18.00 per share. The net proceeds of the IPO to the Company totaled $435.9 million after deducting the underwriters’ discounts and commissions and offering expenses, including $2.5 million of proceeds from the exercise of stock options.

Sensata Technologies Holding was acquired by the Parent in 2006 to facilitate the 2006 Acquisition. Sensata Technologies Holding conducts its business through subsidiary companies which operate business and product development centers in the United States (“U.S.”), the Netherlands and Japan; and manufacturing operations in Brazil, China, South Korea, Malaysia, Mexico, the Dominican Republic and the U.S. Many of these companies are the successors to businesses that have been engaged in the sensing and control business since 1931. TI first acquired an ownership interest in S&C in 1959 through a merger between TI and the former Metals and Controls Corporation.

The sensors business includes pressure sensors and transducers for the automotive, heating, ventilation, air-conditioning (“HVAC”) and industrial markets. These products improve operating performance, for example, by making a car’s heating and air-conditioning systems work more efficiently. Pressure sensors for vehicle stability and fuel injection improve safety and performance by reducing vehicle emissions and improving gas mileage.

The controls business includes motor protectors, circuit breakers and thermostats. These products help prevent damage from overheating and fires in a wide variety of applications, including commercial heating and air-conditioning systems, refrigerators, aircraft, cars, lighting and other industrial applications. The controls business also includes DC to AC power inverters, which enable the operation of electronic equipment when grid power is not available.

All dollar amounts in the financial statements and tables in the notes, except share and per share amounts, are stated in thousands of U.S. dollars, unless otherwise indicated.

7

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and, therefore, do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying financial information reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. The results of operations for the three months ended March 31, 2010 are not necessarily indicative of the results to be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”) with the Securities and Exchange Commission (“SEC”) on March 11, 2010 (the “Prospectus”).

The unaudited condensed consolidated financial statements include the accounts of Sensata Technologies Holding and all of its subsidiaries. All intercompany balances and transactions have been eliminated.

3. New Accounting Standards

In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2009-13, Multiple-Delivery Revenue Arrangements (“ASU 2009-13”). ASU 2009-13 establishes the accounting and reporting guidance for arrangements including multiple revenue-generating activities, and provides amendments to the criteria for separating deliverables, and measuring and allocating arrangement consideration to one or more units of accounting. The amendments of ASU 2009-13 also establish a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendors’s multiple-deliverable revenue arrangements, including information about the nature and terms, significant deliverables, and its performance within arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the application of the relative selling-price method affects the timing or amount of revenue recognition. The amendments in ASU 2009-13 are effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, or January 1, 2011 for the Company. Early application is permitted. The Company is currently evaluating the potential effect, if any, the adoption of ASU 2009-13 will have on its financial position or results of operations.

The Company adopted the following accounting standards during the three months ended March 31, 2010:

In February 2010, the FASB issued ASU 2010-09, Amendments to Certain Recognition and Disclosure Requirements, as an amendment to Accounting Standards Codification (“ASC”) Topic 855, Subsequent Events (“ASC 855”). As a result of ASU 2010-09, SEC registrants will not disclose the date through which management evaluated subsequent events in the financial statements. ASU 2010-09 is effective immediately for all financial statements that have not yet been issued or have not yet become available to be issued, or March 31, 2010 for the Company. The adoption of ASU 2010-09 is for disclosure purposes only and did not have any effect on the Company’s financial position or results of operations.

In January 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements. ASU 2010-06 amends ASC Topic 820, Fair Value Measurement and Disclosure (“ASC 820”) to require a

8

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

number of additional disclosures regarding fair value measurements. In addition to the new disclosure requirements, ASU 2010-06 also amends ASC 820 to clarify that reporting entities are required to provide fair value measurement disclosures for each class of assets and liabilities. Prior to the issuance of ASU 2010-06, the guidance in ASC 820 required separate fair value disclosures for each major category of assets and liabilities. ASU 2010-06 also clarifies the requirement for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. Except for the requirement to disclose information about purchases, sales, issuance and settlements in the reconciliation of recurring Level 3 measurements on a gross basis, all of the provisions of ASU 2010-06 are effective for interim and annual reporting periods beginning after December 15, 2009, or January 1, 2010 for the Company. The requirement to separately disclose purchases, sales, issuances and settlements of recurring Level 3 measurements does not become effective until fiscal years beginning after December 15, 2010, or January 1, 2011 for the Company. The adoption of ASU 2010-06 is for disclosure purposes only and did not have any effect on the Company’s financial position or results of operations.

In June 2009, the FASB issued guidance now codified within ASC Topic 810, Consolidation (“ASC 810”). ASC 810 requires entities to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as one with the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and obligation to absorb losses of the entity that could potentially be significant to the variable interest. The guidance is effective as of the beginning of the annual reporting period commencing after November 15, 2009, or January 1, 2010 for the Company, with early adoption prohibited. The adoption of the guidance codified within ASC 810 did not have any effect on the Company’s financial position or results of operations.

9

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

4. Net Income/(Loss) per Share

The Company computes net income/(loss) per share in accordance with ASC Topic 260, Earnings per Share (“ASC 260”).

Basic net income/(loss) per share is calculated by dividing net income/(loss) by the weighted-average number of ordinary shares outstanding during the period. Diluted earnings per share considers the dilutive effect of all potential future ordinary shares, including stock options and restricted stock, in the weighted average number of common shares outstanding. The following table presents the calculation of basic and diluted net income/(loss) per share for the three months ended March 31, 2010 and 2009:

	For the three months ended
	March 31, 2010		March 31, 2009
Numerator:
Income/(loss) from continuing operations	$	27,310	$	(9,938	)
Loss from discontinued operations		—		(261	)
Net income/(loss)	$	27,310	$	(10,199	)
Denominator:
Weighted-average ordinary shares outstanding		150,211,136		144,056,568
Dilutive effect of stock options		6,183,530		NA
Dilutive effect of unvested restricted stock		301,385		NA
Weighted-average ordinary shares outstanding		156,696,051		144,056,568
Net income/(loss) per share:
Income/(loss) per share from continuing operations—basic	$	0.18	$	(0.07	)
Income/(loss) per share from continuing operations—diluted	$	0.17	$	(0.07	)
Loss from discontinued operations—basic	$	—	$	—
Loss from discontinued operations—diluted	$	—	$	—
Net income/(loss) per share—basic	$	0.18	$	(0.07	)
Net income/(loss) per share—diluted	$	0.17	$	(0.07	)

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SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

For the three months ended March 31, 2010 and 2009, certain share-based awards have been excluded from the computation of diluted income/(loss) per share calculations because including them in the calculations would have been anti-dilutive. In addition, for the three months ended March 31, 2009, the Company has excluded share-based awards associated with its Tranche 2 and 3 option plans as these options were contingently issuable and the contingency had not been satisfied as of that date. Refer to Note 14 for further discussion of the Company’s share-based payment plans.

	For the three months ended
	March 31, 2010	March 31, 2009
Options to purchase ordinary shares	1,375,000	11,834,213
Unvested restricted securities	—	52,118

5. Comprehensive Net Income/(Loss)

Comprehensive net income/(loss) includes net income/(loss), net unrealized gain/(loss) for the effective portion of the Company’s designated cash flow hedges and the net unrealized gain/(loss) associated with the Company’s defined benefit and retiree healthcare plans. The components of comprehensive net income/(loss), net of tax of $0, as of March 31, 2010 and 2009 are as follows:

	For the three months ended
	March 31, 2010		March 31, 2009
Net income/(loss)	$	27,310	$	(10,199	)
Net unrealized gain/(loss) on derivatives		1,212		(2,428	)
Net adjustments on defined benefit and retiree healthcare plans		174		(119	)
Comprehensive net income/(loss)	$	28,696	$	(12,746	)

6. Inventories

Inventories as of March 31, 2010 and December 31, 2009 consist of the following:

	March 31, 2010		December 31, 2009
Finished goods	$	38,759	$	41,931
Work-in-process		25,500		20,627
Raw materials		68,590		62,817
Total	$	132,849	$	125,375

7. Discontinued Operations

In December 2008, the Company announced its intent to sell the automotive vision sensing business (the “Vision business”), which included the assets and operations of SMaL Camera Technologies, Inc. (“SMaL”). The Company purchased SMaL for $12.0 million in March 2007. The economic climate and slower than expected demand for these products were the primary factors in the decision to sell the business. The Company completed the sale of the Vision business during the three months ended June 30, 2009.

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SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Results of operations of the Vision business included within loss from discontinued operations are as follows for the three months ended March 31, 2009:

	For the three months ended
	March 31, 2009
Net revenue	$	628
Loss from operations before income tax	$	(261	)

8. Goodwill and Other Intangible Assets

Goodwill

The following table outlines the changes in goodwill, by segment:

	Sensors								Controls							Total
	Gross Goodwill			Accumulated Impairment		Net Goodwill			Gross Goodwill		Accumulated Impairment			Net Goodwill		Gross Goodwill			Accumulated Impairment			Net Goodwill
Balance as of December 31, 2009	$	1,166,358		$	—	$	1,166,358		$	382,678	$	(18,466	)	$	364,212	$	1,549,036		$	(18,466	)	$	1,530,570
Purchase accounting adjustments		(64	)		—		(64	)		—		—			—		(64	)		—			(64	)
Balance as of March 31, 2010	$	1,166,294		$	—	$	1,166,294		$	382,678	$	(18,466	)	$	364,212	$	1,548,972		$	(18,466	)	$	1,530,506

During the three months ended March 31, 2010, the Company revised its accrual related to severance and facility exit and other costs established through purchase accounting for First Technology Automotive and Special Products. As a result, the Company reduced goodwill by a corresponding amount of $64.

The Company evaluates goodwill and other intangible assets for impairment at the reporting unit level in the fourth quarter of each fiscal year, unless an event occurs or circumstances change between annual tests that would more likely than not reduce the fair value of a reporting unit below its carrying value. As of March 31, 2010, no such events occurred or circumstances changed which would trigger the need for an earlier impairment review.

12

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Other Intangible Assets

Definite-lived intangible assets have been amortized on an accelerated, or economic benefit, basis over their estimated lives. Fully-amortized intangible assets are written off against accumulated amortization. The following table outlines the components of acquisition-related definite-lived intangible assets, excluding goodwill, that are subject to amortization as of March 31, 2010 and December 31, 2009:

	Weighted- Average Life (years)	March 31, 2010								December 31, 2009
		Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Net Carrying Value		Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Net Carrying Value
Completed technologies	16	$	268,170	$	91,217	$	2,430	$	174,523	$	268,170	$	85,233	$	2,430	$	180,507
Customer relationships	10		1,026,840		449,538		12,144		565,158		1,026,840		420,811		12,144		593,885
Non-compete agreements	6		23,400		5,743		—		17,657		23,400		4,711		—		18,689
Tradenames	10		720		363		—		357		720		338		—		382
	11	$	1,319,130	$	546,861	$	14,574	$	757,695	$	1,319,130	$	511,093	$	14,574	$	793,463

Amortization expense on definite-lived intangible assets for the three months ended March 31, 2010 and 2009 was $35,768 and $38,371, respectively. Amortization of these acquisition-related definite-lived intangible assets is estimated to be $107,315 for the remainder of 2010, $131,609 in 2011, $119,983 in 2012, $105,098 in 2013 and $93,323 in 2014.

In connection with the 2006 Acquisition, the Company concluded that its Klixon^® tradename is an indefinite-lived intangible asset, as the brand has been in continuous use since 1927 and the Company has no plans to discontinue using the Klixon^® name. An amount of $59,100 was assigned to the tradename in the Company’s purchase price allocation.

In connection with the Airpax Acquisition, the Company concluded that its Airpax^® tradename is an indefinite-lived intangible asset, as the brand has been in continuous use since 1948 and the Company has no plans to discontinue using the Airpax^® name. An amount of $9,370 was assigned to the tradename in the Company’s purchase price allocation.

In addition, other intangible assets recognized on the unaudited condensed consolidated balance sheets include capitalized software licenses with gross carrying amounts of $7,975 and $6,849 and net carrying amounts of $4,356 and $3,598 as of March 31, 2010 and December 31, 2009, respectively. The weighted-average life for the capitalized software is 3.6 years. Amortization expense on capitalized software for the three months ended March 31, 2010 and 2009 was $368 and $433, respectively.

9. Restructuring Costs

The Company’s restructuring programs consist of the First Technology Automotive Plan, the Airpax Plan and the 2008 Plan. Each of these restructuring programs is described in more detail below.

First Technology Automotive Plan

In December 2006, the Company acquired First Technology Automotive and Special Products from Honeywell International Inc. (“Honeywell”). In January 2007, the Company announced plans (the “First

13

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Technology Automotive Plan”) to close the manufacturing facilities in Standish, Maine and Grand Blanc, Michigan, and to downsize the facility in Farnborough, United Kingdom. Manufacturing at the Maine, Michigan and United Kingdom sites was moved to the Dominican Republic and other Sensata sites. Restructuring liabilities related to these actions relate primarily to exit and related severance costs and affected 143 employees. The actions described above associated with the First Technology Automotive Plan were completed in 2008, and the Company anticipates remaining payments to be paid through 2014 due primarily to contractual lease obligations.

Total cumulative costs incurred to date and expected to be incurred in connection with the First Technology Automotive Plan are $10,712 (severance costs $4,287, facility exit and other costs $6,425). The following table outlines the rollforward of the restructuring liabilities associated with the First Technology Automotive Plan:

	Severance			Facility Exit and Other Costs			Total
Balance as of December 31, 2009	$	63		$	2,532		$	2,595
Purchase accounting adjustments		(63	)		(1	)		(64	)
Payments		—			(46	)		(46	)
Balance as of March 31, 2010	$	—		$	2,485		$	2,485
Employees terminated as of March 31, 2010		143

Total cumulative costs incurred to date and expected to be incurred in connection with the First Technology Automotive Plan are $10,712 (sensors $5,093, controls $2,413, corporate $3,206). The following table outlines the rollforward of the restructuring liabilities by segment, as well as corporate, associated with the First Technology Automotive Plan:

	Sensors			Controls			Corporate			Total
Balance as of December 31, 2009	$	2,530		$	63		$	2		$	2,595
Purchase accounting adjustments		1			(63	)		(2	)		(64	)
Payments		(46	)		—			—			(46	)
Balance as of March 31, 2010	$	2,485		$	—		$	—		$	2,485

During the three months ended March 31, 2010, the Company revised its accrual related to severance and facility exit and other costs established through purchase accounting. As a result, the Company reduced goodwill by a corresponding amount of $64.

Airpax Plan

In July 2007, the Company acquired Airpax Holdings, Inc. In 2007, the Company announced plans (the “Airpax Plan”) to close the facility in Frederick, Maryland and to relocate certain manufacturing lines to existing Sensata and Airpax facilities in Cambridge, Maryland; Shanghai, China; and Mexico, and to terminate certain employees at the Cambridge, Maryland facility. In 2008, the Company announced plans to close the Airpax facility in Shanghai, China. Restructuring liabilities related to these actions relate primarily to exit and related severance costs and affected 331 employees. The actions described above associated with the Airpax Plan were completed in 2009, and the Company anticipates remaining payments to be paid through 2010.

14

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Total cumulative costs incurred to date and expected to be incurred in connection with the Airpax Plan, excluding the impact of changes in foreign currency exchange rates, is $6,494 (severance costs $5,073, facility exit and other costs $1,421). The following table outlines the rollforward of the restructuring liabilities associated with the Airpax Plan:

	Severance			Facility Exit and Other Costs		Total
Balance as of December 31, 2009	$	173		$	526	$	699
Payments		(3	)		—		(3	)
Balance as of March 31, 2010	$	170		$	526	$	696
Employees terminated as of March 31, 2010		331

Total cumulative costs incurred to date and expected to be incurred in connection with the Airpax Plan, excluding the impact of changes in foreign currency exchange rates, are $6,494 (controls $5,026, corporate $1,468). The following table outlines the rollforward of the restructuring liabilities by segment, as well as corporate, associated with the Airpax Plan:

	Controls			Corporate			Total
Balance as of December 31, 2009	$	696		$	3		$	699
Payments		(2	)		(1	)		(3	)
Balance as of March 31, 2010		694		$	2		$	696

2008 Plan

During fiscal years 2008 and 2009, in response to global economic conditions, the Company announced various actions to reduce the workforce in several business centers and manufacturing facilities throughout the world and to move certain manufacturing operations to low-cost countries. During the years ended December 31, 2009 and 2008, the Company recognized charges totaling $23,013 and $18,321, respectively, primarily related to severance, pension curtailment, pension settlement and other related charges, and facility exit and other costs. During the three months ended March 31, 2010, the Company revised its accrual related to severance costs. As a result, the Company recognized a reduction to restructuring expense of $296. The actions described above associated with the 2008 Plan are expected to cost $41,124, excluding the impact of changes in foreign currency exchange rates, and affect 1,977 employees. The Company anticipates these actions to be completed during 2010 and the remaining payments paid through 2014 due primarily to contractual obligations.

15

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Total cumulative costs incurred to date in connection with the 2008 Plan, excluding the impact of changes in foreign currency exchange rates, are $41,038 (severance costs $28,845, pension-related costs $9,716, facility exit and other costs $2,477). The following table outlines the rollforward of the restructuring liabilities, excluding the costs related to pension, associated with the 2008 Plan:

	Severance			Facility Exit and Other Costs			Total
Balance as of December 31, 2009	$	2,964		$	109		$	3,073
Adjustments		(296	)		—			(296	)
Payments		(603	)		(18	)		(621	)
Impact of changes in foreign currency exchange rates		(38	)		(2	)		(40	)
Balance as of March 31, 2010	$	2,027		$	89		$	2,116
Employees terminated as of March 31, 2010		1,930

Total cumulative costs incurred to date in connection with the 2008 Plan, excluding the impact of changes in foreign currency exchange rates, are $41,038 (sensors $1,726, controls $4,700, corporate $34,612). The following table outlines the rollforward of the restructuring liabilities, excluding the costs related to pension, by segment, as well as corporate, associated with the 2008 Plan:

	Sensors			Controls			Corporate			Total
Balance as of December 31, 2009	$	131		$	115		$	2,827		$	3,073
Adjustments		(75	)		122			(343	)		(296	)
Payments		(33	)		15			(603	)		(621	)
Impact of changes in foreign currency exchange rates		(2	)		(3	)		(35	)		(40	)
Balance as of March 31, 2010	$	21		$	249		$	1,846		$	2,116

Summary of Restructuring Programs

The following tables show amounts associated with all of the Company’s restructuring programs described above, and other restructuring activities, consisting primarily of severance, for the three months ended March 31, 2010 and 2009, and where in the unaudited condensed consolidated statement of operations these amounts were recognized. The other restructuring expense of $995 represents the termination of a limited number of employees located in various business centers and facilities throughout the world, and not the initiation of a larger restructuring program.

	FTAS Plan		Airpax Plan		2008 Plan			Other			Total
For the three months ended March 31, 2010
Restructuring	$	—	$	—	$	(296	)	$	995		$	699
Currency translation gain and other, net		—		—		(40	)		(13	)		(53	)
Total	$	—	$	—	$	(336	)	$	982		$	646

16

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

	FTAS Plan		Airpax Plan		2008 Plan			Other		Total
For the three months ended March 31, 2009
Restructuring	$	—	$	—	$	11,488		$	—	$	11,488
Currency translation gain and other, net		—		—		(721	)		—		(721	)
Total	$	—	$	—	$	10,767		$	—	$	10,767

10. Debt

The Company’s debt as of March 31, 2010 and December 31, 2009 consists of the following:

	Weighted- average interest rate for the three months ended March 31, 2010		March 31, 2010			December 31, 2009
Senior secured term loan facility (denominated in U.S. dollars)	2.01	%	$	914,375		$	916,750
Senior secured term loan facility (€383.4 million)	2.69	%		517,069			551,350
Senior Notes (denominated in U.S. dollars)	8.00	%		339,731			340,006
Senior Subordinated Notes (€177.1 million)	9.00	%		238,836			254,303
Senior Subordinated Notes (€65.3 million)	11.25	%		88,057			196,483
Less: current portion				(241,473	)		(15,206	)
Long-term debt, less current portion			$	1,856,595		$	2,243,686
Capital lease and other financing obligations	8.29	%	$	44,217		$	41,934
Less: current portion				(4,236	)		(1,933	)
Capital lease and other financing obligations, less current portion			$	39,981		$	40,001

Extinguishment of Debt

On February 26, 2010, STBV announced the commencement of cash tender offers related to its 8% Senior Notes due 2014 (the “Dollar Notes”), its 9% Senior Subordinated Notes due 2016 and its 11.25% Senior Subordinated Notes due 2014 (together the “Euro Notes”). The cash tender offers settled during the three months ended March 31, 2010. The aggregate principal amount of the Dollar Notes validly tendered was $0.3 million, representing approximately 0.1% of the outstanding Dollar Notes. The aggregate principal amount of the Euro Notes tendered was €71.9 million, representing approximately 22.8% of the outstanding Euro Notes. The Company paid $102.1 million ($0.3 million for the Dollar Notes and €75.9 million for the Euro Notes) to settle the tender offers and retire the debt on March 29, 2010.

In conjunction with these transactions, during the three months ended March 31, 2010, the Company recorded a loss in Currency translation gain and other, net of $8.1 million, including the write off of debt issuance costs of $1.9 million.

17

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

11. Income Taxes

The Company recorded tax provisions for the three months ended March 31, 2010 and 2009 of $11,196 and $7,641, respectively. The Company’s tax provision consists of current tax expense, which relates primarily to the Company’s profitable operations in foreign tax jurisdictions, and deferred tax expense, which relates primarily to the amortization of tax deductible goodwill.

12. Pension and Other Post-Retirement Benefits

The Company provides various retirement plans for employees, including defined benefit, defined contribution and retiree healthcare benefit plans.

Net periodic benefit cost associated with the Company’s defined benefit and retiree healthcare plans for the three months ended March 31, 2010 is as follows:

	U.S. Plans					Non-U.S. Plans
	Defined Benefit			Retiree Healthcare		Defined Benefit
Service cost	$	538		$	65	$	532
Interest cost		720			150		233
Expected return on plan assets		(625	)		—		(185	)
Amortization of net loss		140			3		31
Gain on curtailment		—			—		(111	)
Net periodic benefit cost	$	773		$	218	$	500

Net periodic benefit cost associated with the Company’s defined benefit and retiree healthcare plans for the three months ended March 31, 2009 is as follows:

	U.S. Plans					Non-U.S. Plans
	Defined Benefit			Retiree Healthcare		Defined Benefit
Service cost	$	610		$	70	$	799
Interest cost		790			150		256
Expected return on plan assets		(650	)		—		(207	)
Amortization of net loss		115			—		200
Amortization of prior service cost		—			—		196
Loss on settlement		—			—		152
Net periodic benefit cost	$	865		$	220	$	1,396

During the three months ended March 31, 2010, the Company terminated the employment of 7 employees at one of its subsidiaries. In connection with this event and in accordance with ASC Topic 715, Compensation—Retirement Benefits (“ASC 715”), the Company recognized a curtailment gain of $111 during the three months ended March 31, 2010.

During the three months ended March 31, 2009, the Company terminated the employment of 620 employees at several of its subsidiaries in connection with the 2008 Plan (see Note 9 for further discussion). In connection with these events and in accordance with ASC 715, the Company recognized settlement losses of $152 during the three months ended March 31, 2009.

18

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The Company intends to contribute amounts to the U.S. qualified defined benefit plan in order to meet the minimum funding requirements of federal laws and regulations, plus such additional amounts deemed appropriate by the Company. During the three months ended March 31, 2010, the Company made contributions of $850 to the U.S. qualified defined benefit plan. The Company expects to contribute approximately $3,250 to the U.S. qualified defined benefit plans during the twelve months ending December 31, 2010.

Funding requirements for the non-U.S. defined benefit plans are determined on an individual country and plan basis and are subject to local country practices and market circumstances. During the three months ended March 31, 2010, the Company made contributions of $1,172 to the non-U.S. defined benefit plans. The Company expects to contribute approximately $2,508 to the non-U.S. defined benefit plans during the twelve months ending December 31, 2010.

13. Accrued Expenses and Other Current Liabilities

Included as a component of Accrued expenses and other current liabilities in the accompanying unaudited condensed consolidated balance sheets is accrued interest associated with the Company’s outstanding debt, as described in Note 11 to the consolidated financial statements included in the Prospectus. As of March 31, 2010 and December 31, 2009, accrued interest totaled $30,345 and $27,595, respectively.

14. Share-Based Payment Plans

In 2006, in connection with the 2006 Acquisition, the Company implemented management compensation plans to align compensation for certain key executives with the performance of the Company. The objective of the plans is to promote the long-term growth and profitability of the Company and its subsidiaries by providing those persons who are involved in the Company with an opportunity to acquire an ownership interest in the Company.

The following plans have been in effect since September 2006: 1) First Amended and Restated Sensata Technologies Holding B.V. 2006 Management Option Plan (“Stock Option Plan”) and 2) First Amended and Restated Sensata Technologies Holding B.V. 2006 Management Securities Purchase Plan. The stock awards were granted in the equity of the Company.

During the three months ended September 30, 2009, the Company amended the Stock Option Plan (the “Amendment”) to increase the number of shares reserved for issuance under the Stock Option Plan to 13,082,236 ordinary shares and to change the performance measure of Tranche 3 options to equal that of Tranche 2 options. In effect, Tranche 3 options were converted to Tranche 2 options.

In connection with the completion of the IPO, the Company adopted the Sensata Technologies Holding N.V. 2010 Employee Stock Purchase Plan (“2010 Stock Purchase Plan”) and the Sensata Technologies Holding N.V. 2010 Equity Incentive Plan (“2010 Equity Plan”). The purpose of the 2010 Stock Purchase Plan is to provide an incentive for present and future eligible employees to purchase the Company’s ordinary shares and acquire a proprietary interest in the Company. The purpose of the 2010 Equity Plan is to promote long-term growth and profitability by providing the Company’s present and future directors, officers, employees, consultants and advisors, who are eligible for grant, with incentives to contribute to and participate in the Company’s success. The maximum number of ordinary shares that will be available for sale under the 2010 Stock Purchase Plan is 500,000 ordinary shares. The maximum number of ordinary shares available under the 2010 Equity Plan is 5,000,000 ordinary shares.

19

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The Company’s share-based payment plans are described in the notes to the consolidated financial statements for the year ended December 31, 2009 contained in the Prospectus.

Stock Options

A summary of stock option activity for the three months ended March 31, 2010 is presented below:

	Ordinary Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Tranche 1 Options
Balance as of December 31, 2009	4,991,716		$	8.96	7.28	$	55,259
Granted	—			—
Forfeited	—			—
Canceled	—			—
Exercised	(354,002	)		7.10
Balance as of March 31, 2010	4,637,714		$	9.10	7.09	$	41,082
Vested and exercisable as of March 31, 2010	1,945,158		$	7.06	6.25	$	21,206
Vested and expected to vest as of March 31, 2010 (1)	4,456,080		$	9.04	7.06	$	39,741
	Ordinary Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Tranche 2 and 3 Options
Balance as of December 31, 2009	7,933,432		$	7.45	6.67	$	99,796
Granted	—			—
Forfeited	—			—
Canceled	—			—
Exercised	—			—
Balance as of March 31, 2010	7,933,432		$	7.45	6.42	$	83,373
Vested and exercisable as of March 31, 2010	4,598,318		$	7.07	6.27	$	50,099
Vested and expected to vest as of March 31, 2010 (1)	7,880,613		$	7.45	6.41	$	82,852

(1) The expected to vest options are the result of applying the forfeiture rate assumption, adjusted for cumulative actual forfeitures, to total unvested outstanding options.

20

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

A summary of the status of non-vested options as of March 31, 2010 and of the changes during the three months then ended is presented below. Amounts in the table below have been calculated based on unrounded shares. Because each grant is divided equally between Tranches I, II and III, certain amounts may not add to the totals due to the effect of rounding.

	Stock Options						Weighted-Average Grant-Date Fair Value Per Share
	Tranche I		Tranche II		Tranche III		Tranche I		Tranche II		Tranche III
Nonvested as of December 31, 2009	2,796,244		4,083,383		3,850,049		$	5.34	$	1.98	$	1.21
Granted during the period	—		—		—			—		—		—
Vested during the period	(103,688	)	(2,299,159	)	(2,299,159	)	$	2.88	$	1.70	$	1.20
Forfeited during the period	—		—		—			—		—		—
Nonvested as of March 31, 2010	2,692,556		1,784,224		1,550,890		$	5.44	$	2.35	$	1.19

As of March 31, 2010, there were 157,088 shares available for grant under the Stock Option Plan and 5,000,000 shares available for grant under the 2010 Equity Plan.

Tranche 1 Options: Tranche 1 options, with the exception of those granted during the three months ended September 30, 2009, vest over a period of 5 years (40% vesting year 2, 60% vesting year 3, 80% vesting year 4 and 100% vesting year 5) provided the participant of the option plan is continuously employed by the Company or any of its subsidiaries, and vest immediately upon a change-in-control transaction under which the investor group disposes of or sells more than 50% of the total voting power or economic interest in the Company to one or more independent third parties. Tranche 1 options granted during the three months ended September 30, 2009 vest 20% per year over five years from the date of grant provided the participant of the option plan is continuously employed by the Company or any of its subsidiaries, and vest immediately upon a change-in-control transaction under which the investor group disposes of or sells more than 50% of the total voting power or economic interest in the Company to one or more independent third parties. The Company recognizes the compensation charge for Tranche 1 awards on a straight-line basis over the requisite service period, which for options issued to date is assumed to be the same as the vesting period of 5 years. The options expire 10 years from the date of grant. Except as otherwise provided in specific option award agreements, if a participant ceases to be employed by the Company for any reason, options not yet vested expire at the termination date and options that are fully vested expire 60 days after termination of the participant’s employment for any reason other than termination for cause (in which case the options expire on the participant’s termination date) or due to death or disability (in which case the options expire on the date that is as much as six months after the participant’s termination date). In addition, the Company has a right, but not the obligation, to repurchase all or any portion of award securities issued to a participant at the then current fair value.

There were no grants made during the three months ended March 31, 2010 or 2009.

Under the fair value recognition provisions of ASC 718, the Company recognizes stock-based compensation net of an estimated forfeiture rate and therefore only recognizes compensation cost for those shares expected to vest over the service period of the award. The Company has estimated its forfeitures based on historical experience. During the three months ended March 31, 2009, the Company revised its forfeiture rate from 5% to 11% based upon the actual rate of forfeitures by plan participants. As a result, the Company recorded a reduction to its non-cash compensation expense of $335 during the three months ended March 31, 2009.

The Company recognized non-cash compensation expense related to Tranche 1 options within selling, general and administrative expense for the three months ended March 31, 2010 and 2009 of $932 and $175,

21

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

respectively. As of March 31, 2010, there was $10,748 of unrecognized compensation expense related to non-vested Tranche 1 options. The weighted-average recognition period of the unrecognized compensation expense is 3.8 years. The Company did not recognize a tax benefit associated with these expenses during the three months ended March 31, 2010 and 2009.

Tranche 2 and 3 Options: Tranche 2 and 3 options vest based on the passage of time (over 5 years identical to Tranche 1) and the completion of a liquidity event that results in specified returns on the Sponsors’ investment. Prior to the Amendment to the Stock Option Plan during the three months ended September 30, 2009, the only difference between the terms of Tranche 2 and Tranche 3 awards was the amount of the required return on the Sponsors’ investment. As a result of the Amendment to the Stock Option Plan during the three months ended September 30, 2009, all outstanding Tranche 3 awards required the same specified return on the equity Sponsor’s investment as Tranche 2 awards. The Company accounted for the Amendment as a modification under ASC 718, which resulted in $9,014 of incremental value.

These options expire ten years from the date of grant. Except as otherwise provided in specific option award agreements, if a participant ceases to be employed by the Company for any reason, options not yet vested expire at the termination date and options that are fully vested expire 60 days after termination of the participant’s employment for any reason other than termination for cause (in which case the options expire on the participant’s termination date) or due to death or disability (in which case the options expire on the date that is as much as six months after the participant’s termination date). In addition, the Company has a right, but not the obligation, to repurchase all or any portion of award securities issued to a participant at the then current fair value.

The performance and market vesting conditions contained in the Tranche 2 and 3 awards were satisfied upon the completion of the IPO on March 16, 2010. As a result, the Company recorded a cumulative catch-up adjustment for previously unrecognized compensation expense associated with the Tranche 2 and 3 awards and the related modification totaling $18,876. The remainder of the unrecognized compensation expense will be recognized over the remaining requisite service period.

Total compensation expense related to the Tranche 2 and 3 awards recognized during the three months ended March 31, 2010 was $19,022. No compensation expense was recognized during the three months ended March 31, 2009. As of March 31, 2010, there was $2,743 of unrecognized compensation expense related to non-vested Tranche 2 and 3 options. The weighted-average recognition period of the unrecognized compensation expense is 2.3 years.

There were no Tranche 2 or 3 options granted during the three months ended March 31, 2010 and March 31, 2009.

Restricted Securities

A summary of the unvested restricted securities activity for the three months ended March 31, 2010 is presented below:

	Ordinary Shares	Weighted-Average Grant Date Fair Value
Unvested balance as of December 31, 2009	433,018	$	16.20
Granted shares	—		—
Forfeitures	—		—
Vested	—		—
Unvested balance as of March 31, 2010	433,018	$	16.20

22

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The restricted security aggregate intrinsic value information as of March 31, 2010 and 2009 is presented below. The expected to vest restricted securities are the sum of the vested restricted securities and the result of applying the forfeiture rate assumption to total unvested securities.

	March 31, 2010		March 31, 2009
Vested and outstanding	$	484	$	—
Vested and expected to vest	$	7,405	$	—

The Company recognized non-cash compensation expense of $110 and $26, respectively, in connection with these restricted securities during the three months ended March 31, 2010 and March 31, 2009. At March 31, 2010, the weighted-average remaining period over which the restrictions will lapse is 4.3 years.

15. Related Party Transactions

The discussion below of related party transactions highlights the Company’s significant related party relationships and transactions.

Advisory Agreement

In connection with the 2006 Acquisition, the Company entered into an advisory agreement with the Sponsors for ongoing consulting, management advisory and other services (the “Advisory Agreement”). In consideration for ongoing consulting and management advisory services, the Advisory Agreement requires the Company to pay each Sponsor a quarterly advisory fee equal to the product of $1,000 times such Sponsor’s Fee Allocation Percentage as defined in the Advisory Agreement. For the three months ended March 31, 2010 and 2009, the Company recorded $833 and $1,000, respectively, within selling, general and administrative expense related to the Advisory Agreement.

In addition, in the event of future services provided in connection with any future acquisition, disposition, or financing transactions involving the Company, the Advisory Agreement requires the Company to pay the Sponsors an aggregate fee of one percent of the gross transaction value of each such transaction. In connection with the completion of the Company’s IPO during the three months ended March 31, 2010, the Company paid the Sponsors $4,737. This cost was charged against the gross proceeds of the offering along with other specific incremental costs directly attributable to the Company’s IPO. No amounts were paid during the three months ended March 31, 2009.

At the Sponsors’ option, the Advisory Agreement was terminated in March 2010. In connection with the termination, the Company recognized a charge for a termination fee paid to the Sponsors as required by the Advisory Agreement totaling $22,352. The Company recorded this fee within selling, general and administrative expense during the three months ended March 31, 2010.

Administrative Services Agreement

During the year ended December 31, 2009, the Company entered into a fee for service arrangement with the Parent for ongoing consulting, management advisory and other services (the “Administrative Services Agreement”), effective January 1, 2008. No amounts were paid to the Parent during the three months ended March 31, 2010 and 2009.

23

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Other Arrangements with the Investor Group and its Affiliates

During the three months ended March 31, 2010 and 2009, the Company recorded $40 and $635, respectively, of expenses in selling, general and administrative expense for legal services provided by one of the Parent’s shareholders. During the three months ended March 31, 2010, the Company made payments to this shareholder totaling $2,600. No payments were made during the three months ended March 31, 2009.

During 2009, certain executive officers and other members of management of the Company invested in a limited partnership along with the Sponsors. The limited partnership was formed with the intent to invest in the Company’s bonds among other potential investment opportunities. During 2009, the limited partnership acquired €42,300 aggregate principal amount of 11.25% Senior Subordinated Notes. In connection with the cash tender offer launched on February 26, 2010, the limited partnership validly tendered, and STBV accepted for purchase, all of the 11.25% Senior Subordinated Notes held by the limited partnership. The limited partnership received aggregate consideration of approximately €45,700, including accrued and unpaid interest, in exchange for the tendered notes.

16. Commitments and Contingencies

Off-Balance Sheet Commitments

The Company executes contracts involving indemnifications standard in the relevant industry and indemnifications specific to a transaction such as sale of a business. These indemnifications might include claims relating to the following: environmental matters; intellectual property rights; governmental regulations and employment-related matters; customer, supplier and other commercial contractual relationships; and financial matters. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a third-party claim. Historically, the Company has had only minimal and infrequent losses associated with these indemnities. Consequently, any future liabilities brought about by these indemnities cannot reasonably be estimated or accrued.

On February 4, 2010, STI, an indirect and wholly-owned subsidiary of the Company, negotiated an extension of the transition production agreement with Engineered Materials Solutions, LLC, a wholly-owned subsidiary of Wickeder Westfalenstahl Gmbh, to ensure the continuation of supply of certain materials. The transition production agreement, which was scheduled to expire on February 5, 2010, was extended until May 31, 2010. The Electrical Contact Systems, or “ECS,” business unit of Engineered Materials Solutions is the primary supplier for electrical contacts used in the manufacturing of certain of the Company’s controls products. The Company believes it will have one or more alternative suppliers to cover its electrical contacts requirements prior to May 31, 2010. The principal obligations under the transition production agreement are to provide silver to Engineered Materials Solutions to enable the production of electrical contacts and to purchase these contacts at quantity and price levels that ensure the ECS business unit operates at a break even level. Specifically, each month Engineered Materials Solutions and the Company agree upon the amounts recorded in the profit and loss statement of the Engineered Materials Solutions business based on predetermined accounting principles. Once the applicable profit and loss statement is agreed to by both parties, either Engineered Materials Solutions reimburses the Company for the amount of any profit generated or the Company reimburses Engineered Materials Solutions for the amount of any loss incurred. For the three months ended March 31, 2010, Engineered Materials Solutions paid the Company $0.5 million for profit that was earned through production under the transition production agreement. Under the silver consignment agreement, the Company is required to pay the consignor as the silver is consumed and sold to end customers. Upon termination of this agreement, the Company must either pay for the silver or return it. The Company has issued a letter of credit to the consignor in the amount of $7.0 million which expires on June 30, 2010.

24

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Indemnifications Provided As Part Of Contracts And Agreements

The Company is a party to the following types of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters:

Sponsors: On the closing date of the 2006 Acquisition, the Company entered into customary indemnification agreements with the Sponsors pursuant to which the Company will indemnify the Sponsors, against certain liabilities arising out of performance of a consulting agreement with the Company and each of the Sponsors and certain other claims and liabilities, including liabilities arising out of financing arrangements and securities offerings.

Officers and Directors: In connection with the Company’s IPO, the Company entered into indemnification agreements with each of its board members and executive officers pursuant to which the Company agrees to indemnify, defend and hold harmless, and also advance expenses as incurred, to the fullest extent permitted under applicable law, from damage arising from the fact that such person is or was a director or an officer of the Company or any of its subsidiaries.

The Company’s articles of association provide for indemnification of directors by the Company to the fullest extent permitted by applicable law, as it now exists or may hereinafter be amended (but, in the case of an

amendment, only to the extent such amendment permits broader indemnification rights than permitted prior thereto), against any and all liabilities including all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the Company’s best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful or outside of his or her mandate. No indemnification will be made in respect of any claim, issue or matter as to which such person has been adjudged to be liable for gross negligence or willful misconduct in the performance of his or her duty to the Company. The directors are not indemnified from and against claims to the extent they relate to personal gain, benefits or fees to which they were not entitled under the law, or if the director’s liability on account of gross negligence, willful misconduct or deliberate recklessness has been established at law in the last resort.

In addition, the Company has a liability insurance policy which insures directors and officers against the cost of defense, settlement or payment of claims and judgments under some circumstances.

Underwriters: Pursuant to the terms of the Underwriting Agreement entered into in connection with the Company’s initial public offering, the Company is obligated to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect thereof.

Intellectual Property and Product Liability Indemnification: The Company routinely sells products with a limited intellectual property and product liability indemnification included in the terms of sale. Historically, the Company has had only minimal and infrequent losses associated with these indemnities. Consequently, any future liabilities resulting from these indemnities cannot reasonably be estimated or accrued.

Product Warranty Liabilities

The Company’s standard terms of sale provide its customers with a warranty against faulty workmanship and the use of defective materials. These warranties exist for a period of eighteen months after the date we ship

25

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

the product to our customer or for a period of twelve months after the customer resells our product, whichever comes first. The Company does not offer separately priced extended warranty or product maintenance contracts. The Company’s liability associated with this warranty is, at the Company’s option, to repair the product, replace the product or provide the customer with a credit. The Company also sells products to customers under negotiated agreements or where the Company has accepted the customer’s terms of purchase. In these instances, the Company may make additional warranties, for longer durations consistent with differing end-market practices, and where the Company’s liability is not limited. Finally, many sales take place in situations where commercial or civil codes, or other laws, would imply various warranties and restrict limitations on liability. In the event a warranty claim based on defective materials exists, the Company may be able to recover some of the cost of the claim from the vendor from whom the material was purchased. The Company’s ability to recover some of the costs will depend on the terms and conditions to which the Company agreed when the material was purchased. When a warranty claim is made, the only collateral available to the Company is the return of the inventory from the customer making the warranty claim. Historically, when customers make a warranty claim, the Company either replaces the product or provides the customer with a credit. The Company generally does not rework the returned product.

The Company’s policy is to accrue for warranty claims when both a loss is probable and can be estimated. This is accomplished by reserving for estimated sales returns and estimated costs to rework the product at the time the related revenue is recognized. Reserves for sales returns and liabilities for warranty claims have historically not been material.

In some instances, customers may make claims for costs they incurred or other damages. Any potentially material liabilities associated with these claims are discussed in this Note under the heading Legal Proceedings.

Environmental Remediation Liabilities

The Company’s operations and facilities are subject to U.S. and foreign laws and regulations governing the protection of the environment and the Company’s employees, including those governing air emissions, water discharges, the management and disposal of hazardous substances and wastes, and the cleanup of contaminated sites. The Company could incur substantial costs, including cleanup costs, fines or civil or criminal sanctions, or third-party property damage or personal injury claims, in the event of violations or liabilities under these laws and regulations, or non-compliance with the environmental permits required at the Company’s facilities. Potentially significant expenditures could be required in order to comply with environmental laws that may be adopted or imposed in the future. The Company is, however, not aware of any threatened or pending material environmental investigations, lawsuits or claims involving the Company or its operations.

In 2001, TI Brazil was notified by the State of São Paolo, Brazil, regarding its potential cleanup liability as a generator of wastes sent to the Aterro Mantovani disposal site, which operated near Campinas from 1972 to 1987. The site is a landfill contaminated with a variety of chemical materials, including petroleum products, allegedly disposed at the site. TI Brazil is one of over fifty companies notified of potential cleanup liability. There have been several lawsuits filed by third parties alleging personal injuries caused by exposure to drinking water contaminated by the disposal site. The Company’s subsidiary, Sensata Technologies Brazil, is the successor in interest to TI Brazil. However, in accordance with the terms of the acquisition agreement entered into in connection with the 2006 Acquisition, Texas Instruments retained these liabilities (subject to the limitations set forth in that agreement) and has agreed to indemnify the Company with regard to these excluded liabilities. Additionally, in 2008, lawsuits were filed against Sensata Technologies Brazil alleging personal injuries suffered by individuals who were exposed to drinking water allegedly contaminated by the Aterro disposal site. These

26

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

matters are managed and controlled by TI. TI is defending these lawsuits, which are in early stages. Although Sensata Technologies Brazil cooperates with TI in this process, the Company does not anticipate incurring any non-reimbursable expenses related to the matters described above. Accordingly, no amounts have been accrued for these matters as of March 31, 2010.

Control Devices, Inc. (“CDI”), a wholly-owned subsidiary of Sensata Technologies, Inc., our principal U.S. operating subsidiary (“STI”), acquired through our acquisition of First Technology Automotive, holds a post-closure license, along with GTE Operations Support, Inc. (“GTE”), from the Maine Department of Environmental Protection with respect to a closed hazardous waste surface impoundment located on real property at a facility owned by CDI in Standish, Maine. The post-closure license obligates GTE to operate a pump and treatment process to reduce the levels of chlorinated solvents in the groundwater under the property. The post-closure license obligates CDI to maintain the property and provide access to GTE. The Company does not expect the costs to comply with the post-closure license to be material. As a related but separate matter, pursuant to the terms of an Environmental Agreement dated July 6, 1994, GTE retained liability and agreed to indemnify CDI for certain liabilities related to the soil and groundwater contamination from the surface impoundment and an out-of-service leach field at the Standish, Maine facility, and CDI and GTE have certain obligations related to the property and each other. The site is contaminated primarily with chlorinated solvents. The Company does not expect the remaining cost associated with addressing the soil and groundwater contamination to be material.

The Company is subject to compliance with laws and regulations controlling the export of goods and services. Certain of the Company’s products are subject to International Traffic in Arms Regulation (“ITAR”). These products represent an immaterial portion of the Company’s revenues and the Company has not exported an ITAR-controlled product. However, if in the future the Company decides to export ITAR-controlled products, such transactions would require an individual validated license from the U.S. State Department’s Directorate of Defense Trade Controls. The State Department makes licensing decisions based on type of product, destination of end use, end user and considers national security and foreign policy. The length of time involved in the licensing process varies, but is currently less than three weeks. The license processing time could result in delays in the shipping of products. These laws and regulations are subject to change, and any such change may require the Company to change technology or incur expenditures to comply with such laws and regulations.

Legal Proceedings

The Company accounts for litigation and claims losses in accordance with ASC Topic 450, Contingencies (“ASC 450”). ASC 450 loss contingency provisions are recorded for probable and estimable losses at the Company’s best estimate of a loss, or when a best estimate cannot be made, at the Company’s estimate of the minimum loss. These estimates are often developed prior to knowing the amount of the ultimate loss. These estimates are refined each accounting period as additional information becomes known. Accordingly, the Company is often initially unable to develop a best estimate of loss and therefore the minimum amount, which could be zero, is recorded. As information becomes known, either the minimum loss amount is increased, resulting in additional loss provisions, or a best estimate can be made resulting in additional loss provisions. Occasionally, a best estimate amount is changed to a lower amount when events result in an expectation of a more favorable outcome than previously expected. The Company has recorded litigation reserves of approximately $7.3 million as of March 31, 2010 for various litigation and claims, including the matters described below.

The Company is regularly involved in a number of claims and litigation matters in the ordinary course of business. Most of the Company’s litigation matters are third-party claims for property damage allegedly caused

27

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

by the Company’s products, but some involve allegations of personal injury or wrongful death. The Company believes that the ultimate resolution of the current litigation matters that are pending against the Company, except potentially those matters described below, will not have a material effect on the Company’s financial condition or results of operations.

Ford Speed Control Deactivation Switch Litigation: The Company is involved in a number of litigation matters relating to a pressure switch that TI sold to Ford Motor Company (“Ford”) for several years until 2002. Ford incorporated the switch into a cruise control deactivation switch system that it installed in certain vehicles. Due to concerns that, in some circumstances, this system and switch may cause fires, Ford issued seven separate recalls of vehicles in the United States between 1999 and October 23, 2009, which covered approximately fourteen million vehicles in the aggregate. Also, in October 2009, Mazda issued a recall in the United States of 36,000 vehicles that Ford had manufactured for it which contained the system and switch; and in December 2009, Ford China issued a recall of 528 vehicles imported into China by Ford.

In 2001, TI received a demand from Ford for reimbursement of costs related to the first recall in 1999, a demand that TI rejected and that Ford has not subsequently pursued against the Company. Ford has never made such a demand to the Company, nor made demands of the Company related to the subsequent recalls.

In August 2006, the National Highway Traffic Safety Administration (“NHTSA”) issued a closing report based on a multi-year investigation which found that the fire incidents were caused by system-related factors. On October 14, 2009, NHTSA issued a closing report associated with a more recent recall which modified the findings of the 2006 report but continued to emphasize system factors.

As of March 31, 2010, the Company was a defendant in 26 lawsuits in which plaintiffs have alleged property damage and various personal injuries from the system and switch. Of these cases, 17 are pending in a state multi-district litigation in the 53^rd Judicial Court of Travis County, Texas, In re Ford Motor Company Speed Control Deactivation Switch Litigation, Docket No. D-1-GN-08-00091; 4 are pending in a federal multi-district litigation in the United States District Court for the Eastern District of Michigan, Ford Motor Co. Speed Control Deactivation Switch Products Liability Litigation, Docket No. 05-md-01718. The remainder is in individual dockets in various state courts of California, Georgia and Texas, and the federal court for the Southern District of Iowa.

For the most part, these cases seek an unspecified amount of compensatory and exemplary damages. For the plaintiffs that have requested a specific amount, the range of the demand is $50 thousand to $3.0 million. Ford and TI are co-defendants in each of these lawsuits.

In accordance with terms of the acquisition agreement entered into in connection with the 2006 Acquisition, the Company is managing and defending these lawsuits on behalf of both the Company and TI. The majority of these cases are in discovery. Two have been set for trial and one is on appeal.

During fiscal year 2008, the Company settled all then outstanding wrongful death cases related to these matters for amounts that did not have a material effect on the Company’s financial condition or results of operations. On April 1, 2010, the Company and TI were served in a new lawsuit involving wrongful death claims, Romans v. Texas Instruments Inc. et al, Case # CVH 20100126, Madison County Court of Common Pleas, Ohio. The lawsuit alleges that a 2008 residential fire resulted in the deaths of three people and injuries to a fourth. A separate lawsuit, which arises from the same facts, Romans v. Ford Motor Company, Case #CVC20090074, Madison County Court of Common Pleas, Ohio, has been filed against Ford. On April 9, 2010, the plaintiffs filed a motion to consolidate the two lawsuits.

28

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

As for the cases that are still pending, the Company has included a reserve in its financial statements in the amount of $0.9 million as of March 31, 2010. There can be no assurances, however, that this reserve will be sufficient to cover the extent of the Company’s costs and potential liability from these matters. Any additional liability in excess of this reserve could have a material adverse effect on the Company’s financial condition or results of operations.

Whirlpool Recall Litigation: The Company is involved in litigation relating to certain control products that TI sold between 2000 and 2004 to Whirlpool Corporation (“Whirlpool”). The control products were incorporated into the compressors of certain refrigerators in a number of Whirlpool brands, including Maytag, Jenn-Air, Amana, Admiral, Magic Chef, Performa by Maytag, and Crosley. Whirlpool contends that the control products were defective because they allegedly fail at excessive rates and have allegedly caused property damage, including fires. During fiscal years 2007 and 2008, the Company paid Whirlpool for certain costs associated with third-party claims and other external engineering costs, in amounts that did not have a material adverse effect on the Company’s financial condition or results of operations. During 2009, Whirlpool in conjunction with the Consumer Product Safety Commission (“CPSC”) announced voluntary recalls of approximately 1.8 million refrigerators.

On January 28, 2009, Whirlpool Corporation, as well as its subsidiaries Whirlpool SA and Maytag Corporation, filed a lawsuit against TI and the Company’s subsidiary, STI. The lawsuit was filed in the Circuit Court of Cook County, Illinois, under the name Whirlpool Corp. et al. v. Sensata Technologies, Inc. et al., Docket No. 2009-L-001022. The complaint asserts, among other things, contract claims as well as claims for breach of warranty, fraud, negligence, indemnification and deceptive trade practices. It seeks an unspecified amount of compensatory and exemplary damages. The Company and TI have answered the complaint and denied liability.

The Company and Texas Instruments subsequently filed a cross claim for indemnification against Empresa Braseila de Compressores, S.A., n/k/a Whirlpool SA, and Embraco North America, Inc., together “Embraco.” The Company asserts, among other things, that Embraco was responsible for testing the compatibility of the control product with its compressors, and that the Company and TI have become exposed to litigation because of Embraco’s actions and inactions. The Company believes that Embraco is now a wholly-owned subsidiary of Whirlpool SA.

Discovery on all claims and cross-claims is ongoing, and the court has reserved time in April 2011 for a possible trial.

In January 2009, TI elected under the acquisition agreement to become the controlling party for this lawsuit and will manage and defend the litigation on behalf of both TI and the Company. Although the Company is working with TI to defend the litigation, the Company believes that a loss is probable and, as of March 31, 2010, has recorded a reserve of $5.9 million for this matter. There can be no assurances, however, that this reserve will be sufficient to cover the extent of the Company’s costs and potential liability from this or any related matters. Any additional liability in excess of this reserve could have a material adverse effect on the Company’s financial condition or results of operations.

Pursuant to the terms of the acquisition agreement entered into in connection with the 2006 Acquisition, and subject to the limitations set forth in that agreement, TI has agreed to indemnify the Company for certain claims and litigation, including the Whirlpool matter, provided that the aggregate amount of costs and/or damages from such claims exceeds $30.0 million. If the aggregate amount of costs and/or damages from these claims exceeds $30.0 million, TI is obligated to indemnify the Company for amounts in excess of the $30.0 million threshold up to a cap on TI’s indemnification obligation of $300.0 million. As of March 31, 2010, the Company believes it

29

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

had incurred approximately $26.9 million of costs that apply towards the indemnification. TI has reserved all rights to contest that claim, and may dispute all or some portion of the amount the Company claimed. The Company believes that its costs and/or damages from the Whirlpool Litigation and other claims and litigation matters will ultimately exceed $30.0 million.

The Company is also involved in a related, but separate proceeding with Texas Instrument’s insurer, American Alternative Insurance. On June 3, 2009, Texas Instruments filed a lawsuit against American Alternative seeking reimbursement for its defense costs in the Whirlpool litigation and third party claims. The case, Texas Instruments Incorporated v. American Alternative Ins. Corp., was filed in the 193^rd Court of Dallas County, Texas, No. DC-09-07045-L. On October 16, 2009, American Alternative filed a third party claim against STI alleging that STI assumed liability for the Whirlpool matters under the acquisition agreement referred to in the preceding paragraph. On that basis, American Alternative has asserted that the Company owes American Alternative for any amounts that it may ultimately be required to pay to Texas Instruments. Texas Instruments is defending this claim on STI’s behalf, and has filed an answer denying any liability. As of March 31, 2010, the Company has not recorded a reserve for this matter.

Pelonis Appliances: On December 26, 2008, seven individuals filed suit against Pelonis Appliances, Inc., which sells a fan forced heater product, manufactured by GD Midea Environmental Appliances Mfg. Co. Ltd. (“GD Midea”), that incorporates one of our thermal cut-off products, which was purchased from one of our distributors. The lawsuit, Cueller v. Pelonis Appliances, Inc., No. 08-16188, 160^th Judicial District Court of Dallas County, Texas, arose out of a residential fire that resulted in one death, personal injuries (including burns) to the other plaintiffs, and property damage.

Pelonis demanded indemnity from the Company in a letter dated May 6, 2009, and the Company rejected that demand. On June 9, 2009, the plaintiffs amended their complaint to include STI as a defendant. The plaintiffs seek an unspecified amount of actual and exemplary damages.

On August 3, 2009, the Company answered the amended complaint, denying any liability. The Company also asserted cross-claims against Pelonis for indemnification and against Pelonis and GD Midea as responsible third parties.

Discovery is ongoing, and a trial has been scheduled for August 2, 2010. As of March 31, 2010, the Company has not recorded a reserve for this matter.

Huawei. Huawei, a Chinese telecommunications equipment customer, has informed the Company that it is planning to conduct a field replacement campaign for power supply products containing the Company’s circuit breakers. The customer has alleged defects in the Company’s products, which are sold through distributors to two power supply subcontractors. There are 24,000 systems in the field and the Company estimates that a 100% field replacement campaign would cost approximately $6.0 million. The customer has not yet determined the percentage of systems that will need to be serviced. The Company is contesting the customer’s allegations but working with them to analyze the situation.

The Company has included a reserve in its financial statements in the amount of $0.2 million as of March 31, 2010. There can be no assurances, however, that this reserve will be sufficient to cover the extent of the Company’s costs and potential liability from these matters. Any additional liability in excess of this reserve could have a material adverse effect on the Company’s financial condition or results of operations.

Audi. Audi, a part of the Volkswagen Auto Group, has alleged defects in certain of the Company’s products installed in its vehicles. The customer first brought the claim in 2008 in the amount €8.1 million in expenses

30

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

related to replacement of the Company’s products. The customer subsequently expanded its claim to €24.0 million. The Company contested the customer’s allegations, but entered into discussions seeking to resolve the dispute. In March 2010, the parties reached agreement on resolution of the dispute. The Company agreed to accept the prior set-off by Audi of amounts totaling €0.9 million or $1.2 million. The Company believes that Audi will not further pursue its claims related to these products.

Coffeemakers. Certain European small appliance customers have made claims alleging defects in one of the Company’s electro mechanical controls products. One customer has conducted a recall of their products and two customers have reported several third-party fire incidents. One customer has filed a lawsuit against the Company in Sweden, Jede AB v. Stig Wahlström AB and Sensata Technologies Holland B.V., No. 10017-9, Soederfoern district court, Sweden. The suit alleges damages amounting to €1.8 million. The Company filed its answer on December 1, 2009, and denied liability. Discovery has not yet begun. The other customer claims aggregate to a similar amount. The Company is contesting these claims. As of March 31, 2010, the Company has not recorded a reserve for this matter.

17. Financial Instruments

The carrying value and fair values of financial instruments as of March 31, 2010 and December 31, 2009 are as follows:

	March 31, 2010				December 31, 2009
	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Cash	$	508,247	$	508,247	$	148,468	$	148,468
Trade receivables		208,347		208,347		180,839		180,839
Commodity forward contracts		1,798		1,798		644		644
Interest rate caps		520		520		1,550		1,550
Euro call option		—		—		993		993
Liabilities
Senior secured term loans	$	1,431,444	$	1,368,153	$	1,468,100	$	1,295,320
Senior Notes and Senior Subordinated Notes		666,624		678,986		790,792		768,079
Interest rate collars		7,440		7,440		8,587		8,587
Interest rate swap		2,073		2,073		3,157		3,157
Commodity forward contracts		17		17		193		193

The estimated fair values of amounts reported in the condensed consolidated financial statements have been determined by using available market information and appropriate valuation methodologies. Cash and trade receivables are carried at their cost which approximates fair value because of their short-term nature.

The fair values of the Company’s long-term obligations are determined by using a valuation model that discounts estimated future cash flows at the benchmark interest rate plus an estimated credit spread.

31

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Fair Value Hierarchy

The Company’s financial assets and financial liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with ASC 820. The levels of the fair value hierarchy are described below:

• Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date.

• Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

• Level 3 inputs are unobservable inputs for the asset or liability, allowing for situations where there is little, if any, market activity for the asset or liability.

Measured on a Recurring Basis

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2010, aggregated by the level in the fair value hierarchy within which those measurements fall.

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		March 31, 2010
Assets
Commodity forward contracts	$	—	$	1,798	$	—	$	1,798
Interest rate caps		—		520		—		520
Total	$	—	$	2,318	$	—	$	2,318
Liabilities
Interest rate collars	$	—	$	7,440	$	—	$	7,440
Interest rate swap		—		2,073		—		2,073
Commodity forward contracts		—		17		—		17
Total	$	—	$	9,530	$	—	$	9,530

The valuations of these instruments are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, interest rate volatility and commodity forward curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

32

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2010, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy.

The Company does not have any fair value measurements using significant unobservable inputs (Level 3) as of March 31, 2010 or 2009.

Measured on a Non-Recurring Basis

For assets and liabilities measured on a non-recurring basis during the period, ASC 820 requires quantitative disclosures about the fair value measurements separately for each major category.

The Company evaluates goodwill and other intangible assets for impairment at the reporting unit level in the fourth quarter of each fiscal year, unless events occur which trigger the need for earlier impairment review. As of March 31, 2010, no such events occurred which triggered the need for an earlier impairment review.

In March 2009, the Company determined that goodwill and definite-lived intangible assets associated with its Interconnection reporting unit were impaired and recorded a charge totaling $19,867 in the condensed consolidated statement of operations to reduce its book value to its implied fair value.

The Interconnection assets itemized below were measured at fair value on a non-recurring basis during the three months ended March 31, 2009 using an income approach. The balance of definite-lived intangible assets and goodwill associated with Interconnection as of March 31, 2009, as well as the impairment charges recorded during the three months ended March 31, 2009, were as follows:

	Fair Value Measurement		Quoted Prices in Active Markets for Identical Assets (Level  1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Impaired (Losses)
Definite-lived intangible assets	$	10,630	$	—	$	—	$	10,630	$	(14,574	)
Goodwill		3,341		—		—		3,341		(5,293	)
	$	13,971	$	—	$	—	$	13,971	$	(19,867	)

Derivative Instruments and Hedging Activities

As required by ASC Topic 815, Derivatives and Hedging (“ASC 815”), the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge on the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are

33

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though the Company elects not to apply hedge accounting under ASC 815.

Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements on its U.S. dollar and Euro-denominated floating rate debt. To accomplish this objective, the Company primarily uses interest rate swaps, collars and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable- rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate collars designated as cash flow hedges involve the receipt of variable rate amounts if interest rates rise above the cap strike rate on the contract and payments of variable rate amounts if interest rates fall below the floor strike rate on the contract. Interest rate caps designated as cash flow hedges involve the receipt of variable rate amounts if interest rates rise above the cap strike rate on the contract.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three months ended March 31, 2010, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. For the three months ended March 31, 2010, the Company recorded no ineffectiveness in earnings and no amounts were excluded from the assessment of effectiveness.

Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. As of March 31, 2010, the Company estimates that an additional $9,683 will be reclassified from accumulated other comprehensive loss to interest expense during the twelve months ending March 31, 2011.

As of March 31, 2010, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

Interest Rate Derivatives	Notional (in millions)		Effective Date	Maturity Date	Index	Strike Rate
Interest rate swap	$	95.0	July 27, 2006	January 27, 2011	3-month LIBOR	5.377%
Interest rate collars	€	230.0	July 28, 2008	April 27, 2011	3-month EURIBOR	3.55% - 4.40%
Interest rate cap	€	100.0	March 5, 2009	April 29, 2013	3-month EURIBOR	5.00%
Interest rate cap	$	600.0	March 5, 2009	April 29, 2013	3-month LIBOR	5.00%

34

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Foreign Currency Risk

Consistent with the Company’s risk management objective and strategy to reduce exposure to variability in cash flows on its outstanding debt, in December 2009, the Company executed a foreign currency call option. This instrument was not designated for hedge accounting treatment in accordance with ASC 815. Changes in the fair value of derivatives not designated in hedging relationships are recorded in the statement of operations as a gain or loss within Currency translation gain and other, net. During the three months ended March 31, 2010, the Company recognized a net loss of $993 associated with this derivative. As of March 31, 2010, the Company had the following outstanding derivative that was not designated as a hedge in qualifying hedging relationships:

Non-Designated Derivative	Notional (in millions)		Effective Date	Maturity Date	Strike Rate
Euro call option	€	100.0	December 21, 2009	May 24, 2010	$1.55 to €1.00

Commodity Risk

The Company’s objective in using commodity forward contracts is to offset a portion of its exposure to the potential change in prices associated with certain commodities, including silver, gold, nickel, aluminum and copper, used in the manufacturing of its products. The terms of these forward contracts fix the price at a future date for various notional amounts associated with these commodities. These instruments were not designated for hedge accounting treatment in accordance with ASC 815. In accordance with ASC 815, the Company recognizes the change in fair value of these derivatives in the statement of operations as a gain or loss as a component of Currency translation gain and other, net. During the three months ended March 31, 2010 and 2009, the Company recognized a net gain in its commodity forward contracts of $1,784 and $934, respectively.

The Company had the following outstanding commodity forward contracts that were not designated as hedges in qualifying hedging relationships as of March 31, 2010:

	Notional	Effective Date	Weighted- Average Strike Price
Silver	353,606 troy oz	December 2009 - February 2010	$	17.17
Gold	933 troy oz	December 2009	$	1,107.50
Nickel	197,958 pounds	November 2009 - March 2010	$	8.52
Aluminum	1,733,098 pounds	October 2009 - March 2010	$	0.96
Copper	1,435,742 pounds	February 2010	$	2.92

35

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

Financial Instrument Presentation

The following table presents the fair value of the Company’s derivative financial instruments and their classification on the condensed consolidated balance sheet as of March 31, 2010 and 2009.

	Asset Derivatives						Liability Derivatives
	2010			2009			2010			2009
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments under ASC 815
Interest rate caps	Other assets	$	520	Other assets	$	744		$	—		$	—
Interest rate swap			—			—	Accrued expense and other current liabilities		2,073	Other long-term liabilities		5,520
Interest rate collars			—			—	Other long-term liabilities		7,440	Other long-term liabilities		6,843
Total		$	520		$	744		$	9,513		$	12,363
Derivatives not designated as hedging instruments under ASC 815
Commodity forward contracts	Prepaid expense and other current assets	$	1,798	Prepaid expense and other current assets	$	1,311
Commodity forward contracts							Accrued expense and other current liabilities	$	17		$	—
Total		$	1,798		$	1,311		$	17		$	—

36

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The following table presents the components of accumulated other comprehensive loss related to the Company’s derivative financial instruments as of March 31, 2010:

	Unrealized loss on derivative instruments
Balance as of December 31, 2009	$	(11,805)
Amount of net unrealized loss recognized in accumulated other comprehensive loss		(2,339)
Amount of loss reclassified into interest expense		3,551
Balance as of March 31, 2010	$	(10,593)

The following table presents the effect of the Company’s derivative financial instruments and their classification on the condensed consolidated statement of operations for the three months ended March 31, 2010 and 2009:

Derivatives in ASC 815 Cash Flow Hedging Relationship	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)						Location of Gain or (Loss) Reclassified from Accumulated other comprehensive loss into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated other comprehensive loss into Income (Effective Portion)						Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effective Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing
	2010			2009				2010			2009
Interest Rate Products	$	(2,339	)	$	(5,018	)	Interest expense	$	(3,551	)	$	(2,590	)	NA	NA

Derivatives not designated as hedging instruments under ASC 815	Amount of Gain or (Loss) Recognized in Income on Derivative					Location of Gain or (Loss) Recognized in Income on Derivative
	2010			2009
Commodity forward contracts	$	1,784		$	934	Currency translation gain / (loss) and other, net
Euro call option	$	(993	)	$	—	Currency translation gain / (loss) and other, net

The Company has agreements with its collars and swap derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness where repayment of the indebtedness has been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

As of March 31, 2010, the termination value of derivatives in a liability position which includes accrued interest but excludes any adjustment for non-performance risk, related to the outstanding collar and swap agreements was $12,210. The Company has not posted any collateral related to these agreements. If the Company breached any of the default provisions described above, it would be required to settle its obligations under the agreements at their termination value of $12,210.

37

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

18. Currency Translation Gain and Other

Currency translation gain and other, net consists of the following for the three months ended March 31, 2010 and 2009:

	For the three months ended
	March 31, 2010			March 31, 2009
Currency translation gain on debt	$	60,116		$	68,955
Currency translation loss on net monetary assets		(5,783	)		(424	)
Loss on repurchase of outstanding Senior and Senior Subordinated Notes		(8,098	)		—
Loss on Euro call option		(993	)		—
Gain on commodity forward contracts		1,784			934
Other		159			(323	)
	$	47,185		$	69,142

19. Segment Reporting

The Company organizes its business into two reportable segments, sensors and controls, based on differences in products included in each segment. The reportable segments are consistent with how management views the markets served by the Company and the financial information that is reviewed by its chief operating decision maker. The Company manages its sensors and controls businesses as components of an enterprise for which separate information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance.

An operating segment’s performance is primarily evaluated based on segment operating income, which excludes share-based compensation expense, restructuring charges and certain corporate costs not associated with the operations of the segment including a portion of depreciation and amortization expenses associated with assets recorded in connection with the Sensata, First Technology Automotive and Airpax acquisitions. In addition, an operating segment’s performance excludes results from discontinued operations. These corporate costs are separately stated below and also include costs that are related to functional areas such as accounting, treasury, information technology, legal, human resources, and internal audit. The Company believes that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of its segments. However, this measure should be considered in addition to, not a substitute for, or superior to, income from operations or other measures of financial performance prepared in accordance with U.S. GAAP. The other accounting policies of each of the two reporting segments are the same as those in the summary of significant accounting policies as described in Note 2 included in the Prospectus.

The sensors segment is a manufacturer of pressure, force, and electromechanical sensor products used in subsystems of automobiles (e.g., engine, air-conditioning, ride stabilization) and in industrial products such as HVAC systems.

The controls segment manufactures a variety of control applications used in industrial, aerospace, military, commercial and residential markets. The controls product portfolio includes motor and compressor protectors, circuit breakers, semiconductor burn-in test sockets, electronic HVAC controls, power inverters and precision switches and thermostats.

38

SENSATA TECHNOLOGIES HOLDING N.V.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except share and per share amounts, or unless otherwise noted)

(unaudited)

The following table presents net revenue and operating income for the reported segments and other operating results not allocated to the reported segments for the three months ended March 31, 2010 and 2009:

	For the three months ended
	March 31, 2010			March 31, 2009
Net revenue:
Sensors	$	232,593		$	140,328
Controls		144,544			98,688
Total net revenue	$	377,137		$	239,016
Segment operating income (as defined above):
Sensors	$	77,825		$	35,026
Controls		51,176			23,285
Total segment operating income		129,001			58,311
Corporate and other(1)		(67,468	)		(17,431	)
Amortization of intangible assets and capitalized software		(36,136	)		(38,804	)
Impairment of goodwill and intangible assets		—			(19,867	)
Restructuring		(699	)		(11,488	)
Profit/(loss) from operations		24,698			(29,279	)
Interest expense		(33,516	)		(42,484	)
Interest income		139			324
Currency translation gain and other, net		47,185			69,142
Income/(loss) from continuing operations before income taxes	$	38,506		$	(2,297	)

⁽¹⁾ During the three months ended March 31, 2010, the Company recognized a termination fee of $22,352 (see Note 15 for further discussion) and a cumulative catch-up adjustment for previously unrecognized share-based compensation expense totaling $18,876 (see Note 14 for further discussion).

20. Subsequent Events

On April 1, 2010, STBV, a wholly-owned subsidiary of the Company, announced that it elected to issue notices of redemption with respect to (i) all of its outstanding 11.25% Senior Subordinated Notes at a redemption price equal to 105.625% of the principal amount thereof, which amount is equal to €1,056.25 per €1,000 principal amount and (ii) $138,550,000 in aggregate principal amount of its outstanding 8% Senior Notes at a redemption price equal to 104.000% of the principal amount thereof, which amount is equal to $1,040.00 per $1,000 principal amount. The redemption date for the notes is May 1, 2010. In each case, holders of the notes subject to redemption will also receive accrued and unpaid interest up to, but not including, the redemption date. STBV will redeem all outstanding 11.25% Senior Subordinated Notes and will redeem the 8% Senior Notes on a pro rata basis. STBV expects to pay $245.6 million for the redemption of the notes, including accrued interest, and recognize a loss on the extinguishment of debt, including the write-off of deferred financing costs of $5.0 million.

Additionally, on April 12, 2010, the Company announced that the underwriters of its recently completed IPO exercised their option to purchase an additional 4,740,000 ordinary shares from selling shareholders at a price to the public of $18.00 per share. The sale of the additional shares closed on April 14, 2010. The Company did not receive any proceeds from the sale of the additional shares, other than the proceeds from the exercise of stock options by certain selling shareholders which totalled $2,510.

39

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations

The table below presents our results of operations in millions of dollars and as a percent of net revenue. We have derived the statements of operations for the three months ended March 31, 2010 and 2009 from the unaudited condensed consolidated financial statements, included elsewhere in this report. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not add due to the effect of rounding.

	For the three months ended
	March 31, 2010					March 31, 2009
(Amounts in millions)	Amount			Percent of Revenue		Amount			Percent of Revenue
Net revenue:
Sensors	$	232.6		61.7	%	$	140.3		58.7	%
Controls		144.5		38.3			98.7		41.3
Net revenue		377.1		100.0			239.0		100.0
Operating costs and expenses:
Cost of revenue		232.8		61.7			161.3		67.5
Research and development		4.9		1.3			5.2		2.2
Selling, general and administrative		77.9		20.7			31.6		13.2
Amortization of intangible assets and capitalized software		36.1		9.6			38.8		16.2
Impairment of goodwill and intangible assets		—		—			19.9		8.3
Restructuring		0.7		0.2			11.5		4.8
Total operating costs and expenses		352.4		93.5			268.3		112.2
Profit/(loss) from operations		24.7		6.5			(29.3	)	(12.2	)
Interest expense		(33.5	)	(8.9	)		(42.5	)	(17.8	)
Interest income		0.1		0.0			0.3		0.1
Currency translation gain and other, net		47.2		12.5			69.1		28.9
Income/(loss) from continuing operations before taxes		38.5		10.2			(2.3	)	(1.0	)
Provision for income taxes		11.2		3.0			7.6		3.2
Income/(loss) from continuing operations		27.3		7.2			(9.9	)	(4.2	)
Loss from discontinued operations, net of tax of $0		—		—			(0.3	)	(0.1	)
Net income/(loss)	$	27.3		7.2	%	$	(10.2	)	(4.3	)%

Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009

Net revenue. Net revenue for the three months ended March 31, 2010 increased $138.1 million, or 57.8%, to $377.1 million from $239.0 million for the three months ended March 31, 2009. Net revenue increased 56.6% due to higher volumes and 1.9% due to favorable foreign currency exchange rates, primarily the U.S. dollar to Euro exchange rate. The increases related to volumes and foreign exchange rates were partially offset by a decrease of 0.7% due to pricing. The increase in volumes was due to the replenishment of inventory in our supply chain of 16.2%, growth in our emerging markets (primarily China) of 14.0%, growth in our mature markets of 13.9%, and growth in content of 13.4%, partially offset by a decline of 0.9% due to mix.

Sensors business segment net revenue for the three months ended March 31, 2010 increased $92.3 million, or 65.7%, to $232.6 million from $140.3 million for the three months ended March 31, 2009. Sensors net revenue increased 65.4% due to higher volumes and 1.9% due to favorable foreign exchange rates, primarily the U.S. dollar to Euro exchange rate. The increases related to volumes and foreign exchange rates were partially offset by a decrease of 1.6% due to pricing.

40

Controls business segment net revenue for the three months ended March 31, 2010 increased $45.9 million, or 46.5%, to $144.5 million from $98.7 million for the three months ended March 31, 2009. Controls net revenue increased 44.0% due to higher volumes, 1.9% due to favorable foreign exchange rates, primarily the U.S. dollar to Euro exchange rate, and 0.6% due to pricing.

Cost of revenue. Cost of revenue for the three months ended March 31, 2010 and 2009 was $232.8 million and $161.3 million, respectively. Cost of revenue increased primarily due to the increase in unit volumes sold. Depreciation expense for the three months ended March 31, 2010 and 2009 was $10.8 million and $11.1 million, respectively, of which $9.9 million and $10.1 million, respectively, was included in cost of revenue. Cost of revenue as a percentage of net revenue for the three months ended March 31, 2010 and 2009 was 61.7% and 67.5%, respectively. Cost of revenue as a percentage of net revenue decreased primarily due to cost savings initiatives resulting from the various restructuring activities implemented during the second half of fiscal year 2008 and fiscal year 2009 and the leverage effect of higher sales on certain fixed manufacturing costs.

Research and development expense. Research and development (“R&D”) expense for the three months ended March 31, 2010 and 2009 was $4.9 million and $5.2 million, respectively. R&D expense as a percentage of net revenue for the three months ended March 31, 2010 and 2009 was 1.3% and 2.2%, respectively.

Selling, general and administrative expense. Selling, general and administrative expense for the three months ended March 31, 2010 and 2009 was $77.9 million and $31.6 million, respectively. Selling, general and administrative expenses increased primarily due to expenses of $22.4 million associated with the termination of the Advisory Agreement and $20.1 million associated with share-based compensation, both recognized during the three months ended March 31, 2010. The share-based compensation expense of $20.1 million includes a cumulative catch-up adjustment of $18.9 million associated with the Tranche 2 and 3 option awards performance vesting which occurred on March 16, 2010, the closing date of our initial public offering. Selling, general and administrative expense as a percentage of net revenue for the three months ended March 31, 2010 and 2009 was 20.7% and 13.2%, respectively. Selling, general and administrative expense as a percentage of net revenue increased due to the same reasons described above.

Amortization of intangible assets and capitalized software. Amortization expense associated with definite-lived intangible assets and capitalized software for the three months ended March 31, 2010 and 2009 was $36.1 million and $38.8 million, respectively. The decrease in amortization expense reflects the pattern in which the economic benefits of the intangible assets are being realized. Amortization expense as a percentage of net revenue was 9.6% and 16.2% for the three months ended March 31, 2010 and 2009, respectively. The decrease in amortization expense as a percentage of net revenue is due to the increase in net revenue and the same reason as described above.

Restructuring. Restructuring expense for the three months ended March 31, 2010 and 2009 was $0.7 million and $11.5 million, respectively. During the second half of fiscal year 2008, we implemented several restructuring activities in order to reduce costs given the decline in our net revenue. The restructuring activities consisted of reducing the workforce in our business centers and manufacturing facilities throughout the world and moving certain manufacturing operations to low-cost countries. We continued with these restructuring activities during fiscal year 2009. The restructuring expense of $0.7 million for the three months ended March 31, 2010 consists of $0.8 million related to severance and $(0.1) million related to a pension curtailment gain. Restructuring expense of $11.5 million for the three months ended March 31, 2009 consists of $10.8 million related to severance, $0.4 million related to pension settlement and other related charges, and $0.3 million related to other costs.

Interest expense. Interest expense for the three months ended March 31, 2010 and 2009 was $33.5 million and $42.5 million, respectively. Interest expense for the three months ended March 31, 2010 consists primarily of interest expense on our outstanding debt of $25.4 million, interest associated with our outstanding derivative instruments of $3.6 million, amortization of deferred financing costs of $2.3 million, interest related to uncertain

41

tax positions of $1.1 million and interest associated with our capital lease and other financing obligations of $0.9 million. Interest expense for the three months ended March 31, 2009 consists primarily of interest expense on our outstanding debt of $35.9 million, interest associated with our outstanding derivative instruments of $2.6 million, amortization of deferred financing costs of $2.4 million and interest associated with our capital lease and other financing obligations of $0.9 million. The decrease in interest expense on the outstanding debt of our subsidiary, Sensata Technologies B.V. (“STBV”), was due to a decline in the three month LIBOR and Euribor rates and a reduction in the principal balances of STBV’s senior notes and senior subordinated notes.

Interest income. Interest income for the three months ended March 31, 2010 and 2009 was $0.1 million and $0.3 million, respectively.

Currency translation gain and other, net. Currency translation gain and other, net for the three months ended March 31, 2010 and 2009 was $47.2 million and $69.1 million, respectively. Currency translation gain and other, net for the three months ended March 31, 2010 consists primarily of currency gains of $60.1 million resulting from the re-measurement of our foreign currency denominated debt and net gains of $1.8 million associated with our commodity forward contracts, offset by losses of $8.1 million resulting from the extinguishment of debt and net currency losses of $6.8 million resulting from the re-measurement of net monetary assets denominated in foreign currencies, including the loss of $1.0 million on the Euro call option. Currency translation gain and other, net for the three months ended March 31, 2009 consists primarily of currency gains of $69.0 million resulting from the re-measurement of our foreign currency denominated debt and net gains of $0.9 million associated with our commodity forward contracts, offset by net currency losses of $0.4 million resulting from the re-measurement of net monetary assets denominated in foreign currencies.

Provision for income taxes. Provision for income taxes for the three months ended March 31, 2010 and 2009 totaled $11.2 million and $7.6 million, respectively. Our tax provision consists of current tax expense which relates primarily to our profitable operations in foreign tax jurisdictions and deferred tax expense which relates primarily to amortization of tax-deductible goodwill.

Liquidity and Capital Resources

Cash Flows:

The table below summarizes our primary sources and uses of cash for the three months ended March 31, 2010 and 2009. We have derived the summarized statements of cash flows for the three months ended March 31, 2010 and 2009 from the unaudited condensed consolidated financial statements, included elsewhere in this report. Amounts in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not add due to the effect of rounding.

	For the three months ended
(Amounts in millions)	March 31, 2010			March 31, 2009
Net cash provided by/(used in):
Operating activities:
Continuing operations:
Net income/(loss) adjusted for non-cash items	$	52.0		$	0.5
Changes in operating assets and liabilities		(16.4	)		62.5
Continuing operations		35.6			63.0
Discontinued operations		—			(0.2	)
Operating activities		35.6			62.8
Investing activities:		(5.5	)		(4.3	)
Financing activities		329.6			44.1
Net change	$	359.8		$	102.6

42

Operating activities. Net cash provided by operating activities for the three months ended March 31, 2010 totaled $35.6 million compared to $62.8 million for the three months ended March 31, 2009. Changes in operating assets and liabilities for the three months ended March 31, 2010 and 2009 totaled $(16.4) million and $62.5 million, respectively. The most significant components to the change in operating assets and liabilities of $(16.4) million for the three months ended March 31, 2010 was an increase in accounts receivable of $27.5 million and an increase in inventories of $7.5 million, partially offset by an increase in accounts payable and accrued expenses of $18.0 million. The increase in account receivable was due to an increase in net revenue. The increase in inventories was due to restocking given the increase in net revenue. The increase in accounts payable and accrued expenses was due to the increase in operating costs and accrued interest expense associated with the 8% Senior Notes and 9% Senior Subordinated Notes.

The most significant components to the change in operating assets and liabilities of $62.5 million for the three months ended March 31, 2009 was an increase in accounts payable and accrued expenses of $34.0 million and a decrease in inventories of $24.1 million. The increase in accounts payable and accrued expenses was due to accrued interest expense associated with the 8% Senior Notes and 9% Senior Subordinated Notes which is paid semiannually in the second and fourth quarters of the fiscal year and the initiative to migrate certain strategic vendors to 60-day payment terms. The decrease in inventory was due to initiatives we implemented to minimize the days of inventory on hand given the rapid decline in net revenues during the fourth quarter of fiscal year 2008 and the first quarter of fiscal year 2009.

Investing activities. Net cash used in investing activities for the three months ended March 31, 2010 totaled $5.5 million compared to $4.3 million for the three months ended March 31, 2009. Net cash used in investing activities during the three months ended March 31, 2010 and 2009 primarily consisted of capital expenditures of $5.7 million and $4.3 million, respectively.

In 2010, we anticipate spending approximately $40.0 million to $50.0 million on capital expenditures. Capital expenditures will be funded with cash flows from operations.

Financing activities. Net cash provided by financing activities for the three months ended March 31, 2010 totaled $329.6 million compared to $44.1 million for the three months ended March 31, 2009. Net cash provided by financing activities during the three months ended March 31, 2010 consisted primarily of proceeds of $433.4 million from the issuance of 26.3 million ordinary shares and proceeds of $2.5 million from the exercise of stock options for 0.4 million ordinary shares, offset by payments to repurchase outstanding senior and senior subordinated notes of $102.1 million in addition to principal payments totaling $3.7 million on the U.S. dollar term loan and Euro term loan facilities. Net cash provided by financing activities during the three months ended March 31, 2009 consisted primarily of $48.3 million of borrowings under the revolving credit facility, partially offset by principal payments totaling $3.7 million on the U.S. dollar term loan and Euro term loan facilities

Indebtedness and Liquidity:

Our liquidity requirements are significant due to the highly leveraged nature of our Company. As of March 31, 2010, we had $2,142.3 million in outstanding indebtedness, including our outstanding capital lease and other financing obligations.

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A summary of our indebtedness as of March 31, 2010 is as follows:

(Dollars in thousands)	Weighted-average interest rate for the three months ended March 31, 2010		March 31, 2010
Senior secured term loan facility (denominated in U.S. dollars)	2.01	%	$	914,375
Senior secured term loan facility (€383.4 million)	2.69	%		517,069
Senior Notes (denominated in U.S. dollars)	8.00	%		339,731
Senior Subordinated Notes (€177.1 million)	9.00	%		238,836
Senior Subordinated Notes (€65.3 million)	11.25	%		88,057
Less: current portion				(241,473	)
Long-term debt, less current portion			$	1,856,595
Capital lease and other financing obligations	8.29	%	$	44,217
Less: current portion				(4,236	)
Long-term portion of capital lease and other financing obligations			$	39,981

We have a Senior Secured Credit Facility under which our subsidiaries, Sensata Technologies B.V. and Sensata Technologies Finance Company, LLC, are the borrowers and certain of our other subsidiaries are guarantors. The Senior Secured Credit Facility includes a $150.0 million multi-currency revolving credit facility, a $950.0 million U.S. dollar-denominated term loan facility, and a €325.0 million Euro-denominated term loan facility ($400.1 million, at issuance). As of March 31, 2010, after adjusting for outstanding letters of credit with an aggregate value of $13.9 million, we had $136.1 million of borrowing capacity available under the revolving credit facility. The outstanding letters of credit are issued primarily for the benefit of a consignment arrangement and certain other operating activities. As of March 31, 2010, no amounts had been drawn against these outstanding letters of credit. These outstanding letters of credit are scheduled to expire in June 2010. We do not anticipate difficulty in renewing these letters of credit upon their expiration.

The Senior Secured Credit Facility also provides for an incremental term loan facility and/or incremental revolving credit facility in an aggregate principal amount of $250.0 million under certain conditions at the option of our bank group. During fiscal year 2006, to finance the purchase of First Technology Automotive, we borrowed €73.0 million ($95.4 million, at issuance), reducing the available borrowing capacity of this incremental facility to $154.6 million. The incremental borrowing facilities may be activated at any time up to a maximum of three times during the term of the Senior Secured Credit Facility with consent required only from those lenders that agree, at their sole discretion, to participate in such incremental facility and subject to certain conditions, including pro forma compliance with all financial covenants as of the date of incurrence and for the most recent determination period after giving effect to the incurrence of such incremental facility.

On February 26, 2010, we announced the commencement of cash tender offers related to our 8% Senior Notes due 2014 (“Dollar Notes”), our 9% Senior Subordinated Notes due 2016 and our 11.25% Senior Subordinated Notes due 2014, (together, the “Euro Notes”). The cash tender offers settled during the three months ended March 31, 2010. The aggregate principal amount of the Dollar Notes validly tendered was $0.3 million, representing approximately 0.1% of the outstanding Dollar Notes. The aggregate principal amount of the Euro Notes tendered was €71.9 million, representing approximately 22.8% of the outstanding Euro Notes. We paid $102.1 million ($0.3 million for the Dollar Notes and €75.9 million for the Euro Notes) to settle the tender offers and retire the debt on March 29, 2010. In conjunction with these transactions, during the three months ended March 31, 2010, we recorded a loss in Currency translation gain and other, net of $8.1 million, including the write-off of debt issuance costs of $1.9 million.

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Our sources of liquidity include cash on hand, cash flow from operations and amounts available under the Senior Secured Credit Facility. We believe, based on our current level of operations as reflected in our results of operations for the quarter ended March 31, 2010, these sources of liquidity will be sufficient to fund our operations, capital expenditures, and debt service for at least the next twelve months. We expect to use $245.6 million in the second quarter of 2010 to settle the notices of redemption issued on April 1, 2010.

Our ability to raise additional financing and its borrowing costs may be impacted by short- and long-term debt ratings assigned by independent rating agencies, which are based, in significant part, on our performance as measured by certain credit metrics such as interest coverage and leverage ratios. As of April 23, 2010, Moody’s Investors Service’s corporate credit rating for Sensata Technologies B.V. was B3 with stable outlook and Standard & Poor’s corporate credit rating for Sensata Technologies B.V. was B with positive outlook.

We cannot make assurances that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our revolving credit facility in an amount sufficient to enable us to pay our indebtedness, including the Senior Notes and Senior Subordinated Notes, or to fund our other liquidity needs. Further, our highly leveraged nature may limit our ability to procure additional financing in the future.

As of March 31, 2010, Sensata Technologies B.V. was in compliance with all the covenants and default provisions under its credit arrangements. For more information on our indebtedness and related covenants and default provisions, see the notes to our audited consolidated financial statements included in the Prospectus.

New Accounting Standards

In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2009-13, Multiple-Delivery Revenue Arrangements (“ASU 2009-13”). ASU 2009-13 establishes the accounting and reporting guidance for arrangements including multiple revenue-generating activities, and provides amendments to the criteria for separating deliverables, and measuring and allocating arrangement consideration to one or more units of accounting. The amendments of ASU 2009-13 also establish a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendors’s multiple-deliverable revenue arrangements, including information about the nature and terms, significant deliverables, and its performance within arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the application of the relative selling-price method affects the timing or amount of revenue recognition. The amendments in ASU 2009-13 are effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, or January 1, 2011 for us. Early application is permitted. We are currently evaluating the potential effect, if any, the adoption of ASU 2009-13 will have on our financial position or results of operations.

We adopted the following accounting standards during the three months ended March 31, 2010:

In February 2010, the FASB issued ASU 2010-09, Amendments to Certain Recognition and Disclosure Requirements, as an amendment to Accounting Standards Codification (“ASC”) Topic 855, Subsequent Events (“ASC 855”). As a result of ASU 2010-09, Securities and Exchange Commission (“SEC”) registrants will not disclose the date through which management evaluated subsequent events in the financial statements. ASU 2010-09 is effective immediately for all financial statements that have not yet been issued or have not yet become available to be issued, or March 31, 2010 for us. The adoption of ASU 2010-09 is for disclosure purposes only and did not have any effect on our financial position or results of operations.

In January 2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements. ASU 2010-06 amends ASC Topic 820, Fair Value Measurement and Disclosure (“ASC 820”) to require a number of additional disclosures regarding fair value measurements. In addition to the new disclosure requirements, ASU 2010-06 also amends ASC 820 to clarify that reporting entities are required to provide fair

45

value measurement disclosures for each class of assets and liabilities. Prior to the issuance of ASU 2010-06, the guidance in ASC 820 required separate fair value disclosures for each major category of assets and liabilities. ASU 2010-06 also clarifies the requirement for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. Except for the requirement to disclose information about purchases, sales, issuance and settlements in the reconciliation of recurring Level 3 measurements on a gross basis, all of the provisions if ASU 2010-06 are effective for interim and annual reporting periods beginning after December 15, 2009, or January 1, 2010 for the Company. The requirement to separately disclose purchases, sales, issuances and settlements of recurring Level 3 measurements does not become effective until fiscal years beginning after December 15, 2010, or January 1, 2011 for us. The adoption of ASU 2010-06 is for disclosure purposes only and did not have any effect on our financial position or results of operations.

In June 2009, the FASB issued guidance now codified within ASC Topic 810, Consolidation (“ASC 810”). ASC 810 requires entities to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as one with the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and obligation to absorb losses of the entity that could potentially be significant to the variable interest. The guidance is effective as of the beginning of the annual reporting period commencing after November 15, 2009, or January 1, 2010 for us, with early adoption prohibited. The adoption of the guidance codified within ASC 810 did not have any effect on our financial position or results of operations.

Critical Accounting Policies and Estimates

For a discussion of the critical accounting policies that require the use of significant judgments and estimates by management, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” included in the Prospectus.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

For a discussion of market risk affecting us, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk” included in the Prospectus.

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Item 4. Controls and Procedures.

The required certifications of our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer are included as exhibits to this Quarterly Report on Form 10-Q. The disclosures set forth in this Item 4 contain information concerning the evaluation of our disclosure controls and procedures, internal control over financial reporting and change in internal controls over financial reporting referred to in those certifications. Those certifications should be read in conjunction with this Item 4 for a more complete understanding of the matters covered by the certifications.

Evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2010. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2010, our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended March 31, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls.

There are inherent limitations to the effectiveness of any system of internal control over financial reporting. Accordingly, even an effective system of internal control over financial reporting can only provide reasonable assurance with respect to financial statement preparation and presentation in accordance with U.S. generally accepted accounting principles. Our internal controls over financial reporting are subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

Information regarding legal proceedings appears under the caption “Business—Legal Proceedings” in our Prospectus filed pursuant to Rule 424(b) under the Securities Act with the SEC on March 11, 2010 (the “Prospectus”). The information presented below updates, and should be read in conjunction with, the information disclosed in the Prospectus.

As described in the Prospectus, we are involved in a number of litigation matters relating to a pressure switch that TI sold to Ford Motor Company (“Ford”) for several years until 2002. During fiscal year 2008, we settled all then outstanding wrongful death cases related to these matters for amounts that did not have a material effect on our financial condition or results of operations. On April 1, 2010, we and TI were served in a new lawsuit involving wrongful death claims, Romans v. Texas Instruments Inc. et al, Case # CVH 20100126, Madison County Court of Common Pleas, Ohio. The lawsuit alleges that a 2008 residential fire resulted in the deaths of three people and injuries to a fourth. A separate lawsuit, which arises from the same facts, Romans v. Ford Motor Company, Case #CVC20090074, Madison County Court of Common Pleas, Ohio, has been filed against Ford. On April 9, 2010, the plaintiffs filed a motion to consolidate the two lawsuits.

With respect to the cases that are still pending, we have included a reserve in our financial statements in the amount of $0.9 million as of March 31, 2010.

Item 1A. Risk Factors.

Information regarding risk factors appears under the caption “Risk Factors” in the Prospectus. There have been no material changes to the risk factors previously disclosed under the caption “Risk Factors” in the Prospectus.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended March 31, 2010, we completed the initial public offering of our ordinary shares. The SEC declared the Registration Statement for our initial public offering (File No. 333-163335) effective on March 10, 2010. Pursuant to the Registration Statement, we registered the sale of a total of 26,315,789 ordinary shares to be sold by the Company and 10,024,211 ordinary shares to be sold by selling shareholders, including 4,740,000 ordinary shares to be sold by such selling shareholders pursuant to an underwriters’ over-allotment option. On March 16, 2010, 26,315,789 ordinary shares offered by the Company and 5,284,211 ordinary shares offered by the selling shareholders were sold to the underwriters and issued to the public for an aggregate offering price to the public of $568.8 million. On April 14, 2010, 4,740,000 ordinary shares offered by the selling shareholders were sold to the underwriters pursuant to the over-allotment option and issued to the public for an aggregate offering price to the public of $85.3 million. We did not receive any proceeds from the sale of the ordinary shares by the selling shareholders, other than the proceeds from the exercise of stock options by certain selling shareholders which totaled $2.5 million. The managing underwriters for the initial public offering were Morgan Stanley & Co. Incorporated and Barclays Capital Inc.

We paid the expenses of the initial public offering, other than underwriting discounts and commissions relating to the ordinary shares offered by the selling shareholders. Our expenses for the offering were approximately $40.3 million, including $28.4 million in underwriting discounts and commissions relating to the ordinary shares offered by the Company and a $4.7 million financing fee paid to our Sponsors.

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The net proceeds of the IPO to us were $435.9 million after deducting the underwriters’ discounts and commission and other offering expenses and including $2.5 million of proceeds from the exercise of stock options. During the three months ended March 31, 2010, we used $104.3 million of the net proceeds from our IPO to repay a portion of our long-term indebtedness including accrued interest. In addition, on April 1, 2010, Sensata Technologies B.V., the Company’s wholly-owned subsidiary, announced the issuances of redemption notices with respect to its 11.25% Senior Subordinated Notes and a portion of its 8% Senior Notes, and we intend to use a portion of the net proceeds from our initial public offering to complete the redemptions.

Item 3. Defaults Upon Senior Securities.

None.

Item 5. Other Information

None.

Item 6. Exhibits.

Exhibit No.	Description
10.1	Sensata Technologies Holding N.V. 2010 Employee Stock Purchase Plan.
10.2	Sensata Technologies Holding N.V. 2010 Equity Incentive Plan.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3	Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Section 1350 Certification of Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: April 26, 2010

SENSATA TECHNOLOGIES HOLDING N.V.

/S/    THOMAS WROE        

(Thomas Wroe)

Chairman and Chief Executive Officer

(Principal Executive Officer)

/S/    JEFFREY COTE        

(Jeffrey Cote)

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

/S/    ROBERT HUREAU        

(Robert Hureau)

Vice President and Chief Accounting Officer

(Principal Accounting Officer)

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EX-10.1

Exhibit 10.1

SENSATA TECHNOLOGIES HOLDING N.V.

2010 EMPLOYEE STOCK PURCHASE PLAN

Table of Contents

			Page
1.	Purpose		1
2.	Definitions		1
3.	Eligibility		2
	(a)	The Company	2
	(b)	Designated Subsidiaries	3
4.	Exercise Periods		3
	(a)	In General	3
	(b)	Changes by Committee	3
5.	Participation		3
6.	Plan Contributions		3
	(a)	Contribution by Payroll Deduction	3
	(b)	Payroll Deduction Election on Enrollment Agreement	3
	(c)	Commencement of Payroll Deductions	4
	(d)	Automatic Continuation of Payroll Deductions	4
	(e)	Change of Payroll Deduction Election	4
	(f)	Automatic Changes in Payroll Deduction	4
7.	Grant of Option		4
	(a)	Ordinary Shares Subject to Option	4
	(b)	Exercise Price	5
	(c)	Fair Market Value	5
	(d)	Limitation on Option that may be Granted	5
	(e)	No Rights as Shareholder	5
8.	Exercise of Options		5
	(a)	Automatic Exercise	5
9.	Issuance of Shares		6
	(a)	Delivery of Shares	6
	(b)	Registration of Shares	6
	(c)	Compliance with Applicable Laws	6
	(d)	Withholding	6
10.	Participant Accounts		7
	(a)	Bookkeeping Accounts Maintained	7
	(b)	Participant Account Statements	7
11.	Designation of Beneficiary		7
	(a)	Designation	7

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	(b)	Change of Designation	7
12.	Transferability		7
13.	Withdrawal; Termination of Employment		7
	(a)	Withdrawal	7
	(b)	Effect of Withdrawal on Subsequent Participation	8
	(c)	Termination of Employment	8
14.	Ordinary Shares Available under the Plan		8
	(a)	Number of Shares	8
	(b)	Adjustments Upon Changes in Capitalization; Corporate Transactions	8
15.	Administration		9
	(a)	Committee	9
	(b)	Requirements of Exchange Act	10
16.	Amendment, Suspension, and Termination of the Plan		10
	(a)	Amendment of the Plan	10
	(b)	Suspension of the Plan	10
	(c)	Termination of the Plan	10
17.	Sub-Plans		11
18.	Notices		11
19.	Expenses of the Plan		11
20.	No Employment Rights		11
21.	Applicable Law		11
22.	Additional Restrictions of Rule 16b-3		11
23.	Effective Date		11

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SENSATA TECHNOLOGIES HOLDING N.V.

EMPLOYEE STOCK PURCHASE PLAN

1. Purpose. The purpose of the Plan is to provide incentive for present and future eligible Employees to acquire a proprietary interest (or increase an existing proprietary interest) in the Company through the purchase of Ordinary Shares. It is the Company’s intention that the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. Accordingly, the provisions of the Plan shall be administered, interpreted and construed in a manner consistent with the requirements of that section of the Code.

2. Definitions.

(a) “Applicable Percentage” means the percentage specified in Section 7(b), subject to adjustment by the Committee as provided in Section 7(b).

(b) “Board” means the Board of Directors of the Company.

(c) “Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto.

(d) “Committee” means the committee appointed by the Board to administer the Plan as described in Section 15 of the Plan or, in the absence of a committee, the Board.

(e) “Company” means Sensata Technologies Holding N.V., a Dutch public limited liability company.

(f) “Compensation” means, with respect to each Participant for each pay period: base salary, wages, overtime, shift premium, performance bonus and sales bonus paid to such Participant by the Company or a Designated Subsidiary. Except as otherwise determined by the Committee, “Compensation” does not include: (i) any amounts contributed by the Company or a Designated Subsidiary to any pension plan, (ii) any automobile or relocation allowances (or reimbursement for any such expenses), (iii) any amounts paid as a starting bonus or referral fee, (iv) any amounts realized from the exercise of any stock options or incentive awards, (v) any amounts paid by the Company or a Designated Subsidiary for other fringe benefits, such as health and welfare, hospitalization and group life insurance benefits, or perquisites, or paid in lieu of such benefits, or (vi) other similar forms of extraordinary compensation.

(g) “Continuous Status as an Employee” means the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not be considered interrupted in the case of a leave of absence agreed to in writing by the Company or the Designated Subsidiary that employs the Employee, provided that such leave is for a period of not more than 90 days or reemployment upon the expiration of such leave is provided either by contract or statute.

(h) “Designated Subsidiaries” means the Subsidiaries whose employees have been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan.

(i) “Employee” means any person whose customary employment is at least twenty (20) hours per week and more than five (5) months in any calendar year.

(j) “Entry Date” means the first Trading Day of each Exercise Period.

(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(l) “Exercise Date” means the last Trading Day of each Exercise Period.

(m) “Exercise Period” means, subject to adjustment as provided in Section 4(b), the approximately six (6) month period beginning on each April 1 and ending the last Trading Day on or before September 30 of such year, or beginning on each October 1 and ending the last Trading Day on or before March 31 of such year.

(n) “Exercise Price” means the price per Ordinary Share offered in a given Exercise Period determined as provided in Section 7(b).

(o) “Fair Market Value” means, with respect to an Ordinary Share, the Fair Market Value as determined under Section 7(c).

(p) “Ordinary Shares” means the Company’s ordinary shares, par value €0.01 per share.

(q) “Participant” means an Employee who is eligible to participate in the Plan under Section 3 and who has elected to participate in the Plan by filing an enrollment agreement as provided in Section 5 hereof.

(r) “Plan” means the Sensata Technologies Holding N.V. 2010 Employee Stock Purchase Plan, as in effect from time to time.

(s) “Plan Contributions” means, with respect to each Participant, the lump sum cash transfers, if any, made by the Participant to the Plan pursuant to Section 6(a) hereof, plus the after-tax payroll deductions, if any, withheld from the Compensation of the Participant and contributed to the Plan for the Participant as provided in Section 6 hereof, and any other amounts contributed to the Plan for the Participant in accordance with the terms of the Plan.

(t) “Subsidiary” means any corporation, domestic or foreign, of which the Company owns, directly or indirectly, 50% or more of the total combined voting power of all classes of stock, and that otherwise qualifies as a “subsidiary corporation” within the meaning of Section 424(f) of the Code.

(u) “Trading Day” means a day on which the New York Stock Exchange is open for trading.

3. Eligibility.

(a) The Company. The Board shall have the right, but not the obligation, to designate the employees of the Company as eligible to participate in the Plan. Upon such

2

designation, any individual who has completed at least thirty (30) days of employment with the Company and who is an Employee of the Company as of the Entry Date of a given Exercise Period shall be eligible to become a Participant as of the Entry Date of such Exercise Period.

(b) Designated Subsidiaries. Any individual who has completed at least thirty (30) days of employment with any Designated Subsidiary and who is an Employee of any Designated Subsidiary as of the Entry Date of a given Exercise Period shall be eligible to become a Participant as of the Entry Date of such Exercise Period.

4. Exercise Periods.

(a) In General. The Plan shall generally be implemented by a series of Exercise Periods, each of which lasts approximately six (6) months.

(b) Changes by Committee. The Committee shall have the power to make changes to the duration and/or the frequency of Exercise Periods with respect to future offerings if such change is announced at least five (5) days prior to the scheduled beginning of the first Exercise Period to be affected.

5. Participation. Employees meeting the eligibility requirements of Section 3 hereof may elect to participate in the Plan commencing on any Entry Date by completing an enrollment agreement on the form provided by the Company and filing the enrollment agreement with the Company (or a person or firm designated by the Committee) on or prior to such Entry Date, unless a later time for filing the enrollment agreement is set by the Committee for all eligible Employees with respect to a given offering. Notwithstanding the foregoing, eligible Employees who are citizens or residents of a foreign jurisdiction may be excluded from the Plan if the grant of an option under the Plan or any offering to a citizen or resident of the foreign jurisdiction is prohibited under the laws of such jurisdiction, to the extent allowed under Section 423 of the Code.

6. Plan Contributions.

(a) Contribution by Payroll Deduction. Except as otherwise authorized by the Committee, all contributions to the Plan shall be made only by payroll deductions. The Committee may, but need not, permit Participants to make after-tax contributions to the Plan at such times and subject to such terms and conditions as the Committee may in its discretion determine. All such additional contributions shall be made in a manner consistent with the provisions of Section 423 of the Code or any successor thereto, and shall be treated in the same manner as payroll deductions contributed to the Plan as provided herein.

(b) Payroll Deduction Election on Enrollment Agreement. At the time a Participant files the enrollment agreement with respect to an Exercise Period, the Participant may authorize payroll deductions to be made on each payroll date during the portion of the Exercise Period that he or she is a Participant in an amount not less than 1% and not more than 10% of the Participant’s Compensation on each payroll date during the portion of the Exercise Period that he or she is a Participant. The amount of payroll deductions must be a whole percentage (e.g., 1%, 2%, 3%, etc.) of the Participant’s Compensation.

3

(c) Commencement of Payroll Deductions. Except as otherwise determined by the Committee under rules applicable to all Participants, payroll deductions shall commence with the earliest administratively practicable payroll period that begins on or after the Entry Date with respect to which the Participant files an enrollment agreement in accordance with Section 5.

(d) Automatic Continuation of Payroll Deductions. Unless a Participant elects otherwise prior to the Exercise Date of an Exercise Period, including the Exercise Date prior to termination in the case of an Exercise Period terminated under Section 4(b) hereof, such Participant shall be deemed (i) to have elected to participate in the immediately succeeding Exercise Period (and, for purposes of such Exercise Period the Participant’s “Entry Date” shall be deemed to be the first day of such Exercise Period) and (ii) to have authorized the same payroll deduction for the immediately succeeding Exercise Period as was in effect for the Participant immediately prior to the commencement of the succeeding Exercise Period.

(e) Change of Payroll Deduction Election. A Participant may decrease or increase the rate or amount of his or her payroll deductions during an Exercise Period (within the limitations of Section 6(b) above) by completing and filing with the Company (or a person or firm designated by the Committee) a new enrollment agreement authorizing a change in the rate or amount of payroll deductions; provided, that a Participant may not change the rate or amount of his or her payroll deductions more than once in any Exercise Period. Except as otherwise determined by the Committee under rules applicable to all Participants, the change in rate or amount shall be effective as of the earliest administratively practicable payroll period that begins on or after the date the Committee receives the new enrollment agreement. Additionally, a Participant may discontinue his or her participation in the Plan as provided in Section 13(a).

(f) Automatic Changes in Payroll Deduction. Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code, Section 7(d) hereof, or any other applicable law, a Participant’s payroll deductions for any calendar year may be decreased, including to 0%, at such time during such calendar year that the aggregate of all payroll deductions accumulated during such calendar year are equal to the product of $25,000 multiplied by the Applicable Percentage for the calendar year. Payroll deductions shall recommence at the rate provided in the Participant’s enrollment agreement at the beginning of the first Exercise Period beginning in the following calendar year, unless the Participant terminates participation as provided in Section 13(a).

7. Grant of Option.

(a) Ordinary Shares Subject to Option. On a Participant’s Entry Date, subject to the limitations set forth in Section 7(d) and this Section 7(a), the Participant shall be granted an option to purchase on the subsequent Exercise Date (at the Exercise Price determined as provided in Section 7(b) below) up to a number of Ordinary Shares determined by dividing such Participant’s Plan Contributions accumulated prior to such Exercise Date and retained in the Participant’s account as of such Exercise Date by the Exercise Price; provided, that the maximum number of Ordinary Shares a Participant may purchase during any Exercise Period shall be 5,000. Fractional shares are expressly permitted unless otherwise determined by the Committee.

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(b) Exercise Price. The Exercise Price per Ordinary Share offered to each Participant in a given Exercise Period shall be the Applicable Percentage of the Fair Market Value of an Ordinary Share on the Exercise Date. The Applicable Percentage with respect to each Exercise Period shall be 95% unless and until such Applicable Percentage is increased by the Committee, in its sole discretion, provided that any such increase in the Applicable Percentage with respect to a given Exercise Period must be established not less than fifteen (15) days prior to the Entry Date thereof.

(c) Fair Market Value. The Fair Market Value of the Ordinary Shares is (a) while the Ordinary Shares are readily traded on an established national or regional securities exchange, the closing transaction price of such Ordinary Shares as reported by the principal exchange on which such Ordinary Shares are traded on the date as of which such value is being determined or, if there were no reported transaction for such date, the opening transaction price as reported by the exchange for the first trading date following the date by which such value is being determined on the next preceding date for which a transaction was reported, (b) if the Ordinary Shares are not readily traded on an established national or regional securities exchange, the average of the bid and ask prices for such Ordinary Shares on the date as of which such value is being determined, where quoted for such Ordinary Shares, or (c) if Fair Market Value cannot be determined under clause (a) or clause (b) above, or if the Committee determines in its sole discretion that the Ordinary Shares are too thinly traded for Fair Market Value to be determined pursuant to clause (a) or clause (b), the value as determined by the Committee, in its sole discretion, on a good faith basis.

(d) Limitation on Option that may be Granted. Notwithstanding any provision of the Plan to the contrary, no Participant shall be granted an option under the Plan (i) to the extent that if, immediately after the grant, such Employee (including any Ordinary Shares which are attributed to such Employee pursuant to Section 424(d) of the Code) would own Ordinary Shares and/or hold outstanding options to purchase Ordinary Shares possessing, in the aggregate, 5% or more of the total combined voting power or value of all classes of stock of the Company or of any Subsidiary of the Company or a related corporation as computed under Section 423(b)(3) of the Code and the Treasury Regulations thereunder, or (ii) to the extent that his or her rights to purchase Ordinary shares under all employee stock purchase plans of the Company and its Subsidiaries intended to qualify under Section 423 of the Code accrue at a rate which exceeds $25,000 of Fair Market Value of Ordinary Shares (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time, as determined in accordance with section 423(b)(8) of the Code and the Treasury Regulations thereunder.

(e) No Rights as Shareholder. A Participant will have no interest or voting right in the Ordinary Shares covered by his option until such option has been exercised.

8. Exercise of Options.

(a) Automatic Exercise. A Participant’s option for the purchase of Ordinary Shares will be exercised automatically on each Exercise Date, and the maximum number of full Ordinary Shares subject to the option shall be purchased for the Participant at the applicable Exercise Price with the accumulated Plan Contributions then credited to the Participant’s account

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under the Plan, subject to the limitation in Section 7(a) or any other limitation in the Plan. During a Participant’s lifetime, a Participant’s option to purchase Ordinary Shares hereunder is exercisable only by the Participant.

9. Issuance of Shares.

(a) Delivery of Shares. The Company (or a person or firm designated by the Committee) will hold in book-entry the Ordinary Shares purchased by each Participant under the Plan. Upon receipt of written request from or on behalf of a Participant, the Company (or a person or firm designated by the Committee) shall, as promptly as practicable, arrange for the delivery to such Participant (or the Participant’s beneficiary), as appropriate, or to a custodial account for the benefit of such Participant (or the Participant’s beneficiary) as appropriate, of a certificate representing the shares purchased under the Plan, and the Company shall assume, for tax purposes, such Participant’s disposition of the underlying shares (unless such Participant clearly advises the Company (or a person or firm designated by the Committee) otherwise in writing); provided that in lieu of delivering a certificate representing any fractional share, the Company may, in the sole discretion of the Committee, pay to the Participant or credit to the Participant’s account the fair market value of such fractional share. In the event that a Participant provides a written statement of his intention not to sell or otherwise dispose of such shares as set forth in the foregoing sentence, such Participant shall be required to report to the Company (or a person or firm designated by the Committee) any subsequent disposition of such shares prior to the expiration of the holding periods specified by Section 423(a)(1) of the Code. If and to the extent that such disposition imposes upon the Company federal, state, local or other withholding tax requirements, or any such withholding is required to secure for the Company an otherwise available tax deduction, the Participant must remit to the Company an amount sufficient to satisfy those requirements.

(b) Registration of Shares. Ordinary Shares to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and his or her spouse, as requested by the Participant.

(c) Compliance with Applicable Laws. The Plan, the grant and exercise of options to purchase shares under the Plan, and the Company’s obligation to sell and deliver Ordinary Shares upon the exercise of options to purchase Ordinary Shares shall be subject to compliance with all applicable federal, state and foreign laws, rules and regulations and the requirements of any stock exchange on which the Ordinary Shares may then be listed.

(d) Withholding. The Company may make such provisions as it deems appropriate for withholding by the Company pursuant to federal or state tax laws of such amounts as the Company determines it is required to withhold in connection with the purchase or sale by a Participant of any Ordinary Shares acquired pursuant to the Plan. The Company may require a Participant to satisfy any relevant tax requirements before authorizing any issuance of Ordinary Shares to such Participant.

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10. Participant Accounts.

(a) Bookkeeping Accounts Maintained. Individual bookkeeping accounts will be maintained for each Participant in the Plan to account for the balance of his Plan Contributions, options issued, and shares purchased under the Plan. However, all Plan Contributions made for a Participant shall be deposited in the Company’s general corporate accounts, and no interest shall accrue or be credited with respect to a Participant’s Plan Contributions. All Plan Contributions received or held by the Company may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate or otherwise set apart such Plan Contributions from any other corporate funds.

(b) Participant Account Statements. Statements of account will be given to Participants quarterly, which statements will set forth the amounts of payroll deductions, the per share purchase price and the number of shares purchased.

11. Designation of Beneficiary.

(a) Designation. A Participant may file with the Company (or a person or firm designated by the Committee) a written designation of a beneficiary who is to receive any shares and cash, if any, from the Participant’s account under the Plan in the event of the Participant’s death subsequent to an Exercise Date on which the Participant’s option hereunder is exercised but prior to delivery to the Participant of such shares and cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of the Participant’s death prior to the exercise of the option.

(b) Change of Designation. A Participant’s beneficiary designation may be changed by the Participant at any time in the manner designated by the Company (or a person or firm designated by the Committee). In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company (or a person or firm designated by the Committee) shall deliver such shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company (or a person or firm designated by the Committee), in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

12. Transferability. Neither Plan Contributions credited to a Participant’s account nor any rights to exercise any option or receive Ordinary Shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will or the laws of descent and distribution, or as provided in Section 11). Any attempted assignment, transfer, pledge or other distribution shall be without effect, except that the Company may treat such act as an election to withdraw in accordance with Section 13(a).

13. Withdrawal; Termination of Employment.

(a) Withdrawal. A Participant may withdraw from the Plan at any time by giving written notice to the Company (or a person or firm designated by the Committee). Payroll

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deductions, if any have been authorized, shall cease as soon as administratively practicable after receipt of the Participant’s notice of withdrawal, and, subject to administrative practicability, no further purchases shall be made for the Participant’s account. All Plan Contributions credited to the Participant’s account, if any, and not yet invested in Ordinary Shares, will be paid to the Participant as soon as administratively practicable after receipt of the Participant’s notice of withdrawal. The Participant’s unexercised options to purchase shares pursuant to the Plan automatically will be terminated. Payroll deductions will not resume on behalf of a Participant who has withdrawn from the Plan (a “Former Participant”) unless the Former Participant enrolls in a subsequent Exercise Period in accordance with Section 5 and subject to the restriction provided in Section 13(b), below.

(b) Effect of Withdrawal on Subsequent Participation. A Former Participant who has withdrawn from the Plan pursuant to this Section 13(b) shall be eligible to participate in the Plan at the beginning of the next Exercise Period following the date the Former Participant withdrew, and the Former Participant must submit a new enrollment agreement in order to again become a Participant as of that date.

(c) Termination of Employment. Upon termination of a Participant’s Continuous Status as an Employee of the Company or any Designated Subsidiary prior to any Exercise Date for any reason except death or disability, the Plan Contributions credited to the Participant’s account and not yet invested in Ordinary Shares will be returned to the Participant. In the case of death or disability, any Plan Contributions credited to the Participant’s account and not yet invested in Ordinary Shares will be used to acquire Ordinary Shares on the Exercise Date following the Participant’s death or disability pursuant to Section 8. Any amount remaining to the credit of a Participant’s account after the purchase of shares by the Participant on such Exercise Date which is insufficient to purchase a full Ordinary Share will be returned to the Participant.

14. Ordinary Shares Available under the Plan.

(a) Number of Shares. Subject to adjustment as provided in Section 14(b) below, the maximum number of Ordinary Shares that shall be made available for sale under the Plan shall be 500,000. Ordinary Shares subject to the Plan may be newly issued shares or shares reacquired in private transactions or open market purchases. If and to the extent that any right to purchase reserved shares shall not be exercised by any Participant for any reason or if such right to purchase shall terminate as provided herein, shares that have not been so purchased hereunder shall again become available for the purpose of the Plan unless the Plan shall have been terminated, but all shares sold under the Plan, regardless of source, shall be counted against the limitation set forth above.

(b) Adjustments Upon Changes in Capitalization; Corporate Transactions.

(i) If the outstanding Ordinary Shares are increased or decreased, or are changed into or are exchanged for a different number or kind of shares, as a result of one or more reorganizations, restructurings, recapitalizations, reclassifications, stock splits, reverse stock splits, stock dividends or the like, upon authorization of the Committee, appropriate adjustments shall be made in the number and/or kind of shares, and the per-share option price thereof, which may be issued in the aggregate and to any Participant upon exercise of options granted under the Plan.

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(ii) In the event of the proposed dissolution or liquidation of the Company, the Exercise Period will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Committee.

(iii) In the event of a proposed sale of all or substantially all of the Company’s assets, or the merger of the Company with or into another corporation (each, a “Sale Transaction”), each option under the Plan shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the Committee determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, to shorten the Exercise Period then in progress by setting a new Exercise Date (the “New Exercise Date”). If the Committee shortens the Exercise Period then in progress in lieu of assumption or substitution in the event of a Sale Transaction, the Committee shall notify each Participant in writing, at least ten (10) days prior to the New Exercise Date, that the exercise date for such Participant’s option has been changed to the New Exercise Date and that such Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Plan as provided in Section 13(a). For purposes of this Section 14(b), an option granted under the Plan shall be deemed to have been assumed if, following the Sale Transaction, the option confers the right to purchase, for each share of option stock subject to the option immediately prior to the Sale Transaction, the consideration (whether stock, cash or other securities or property) received in the Sale Transaction by holders of Ordinary Shares for each Ordinary Share held on the effective date of the Sale Transaction (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Ordinary Shares); provided, that if the consideration received in the Sale Transaction was not solely common stock or ordinary shares of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Committee may, with the consent of the successor corporation and the Participant, provide for the consideration to be received upon exercise of the option to be solely common stock or ordinary shares of the successor corporation or its parent equal in fair market value to the per share consideration received by the holders of Ordinary Shares in the Sale Transaction.

(iv) In all cases, the Committee shall have sole discretion to exercise any of the powers and authority provided under this Section 14, and the Committee’s actions hereunder shall be final and binding on all Participants. No fractional shares of stock shall be issued under the Plan pursuant to any adjustment authorized under the provisions of this Section 14.

15. Administration.

(a) Committee. The Plan shall be administered by the Committee. The Committee shall have the authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. The administration, interpretation, or application of the Plan by the Committee shall be final, conclusive and binding upon all persons. In addition, the Committee shall have the authority to retain and engage such third parties as it shall determine necessary to assist with the administration of the Plan.

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(b) Requirements of Exchange Act. Notwithstanding the provisions of Section 15(a) above, in the event that Rule 16b-3 promulgated under the Exchange Act or any successor provision thereto (“Rule 16b-3”) provides specific requirements for the administrators of plans of this type, the Plan shall only be administered by such body and in such a manner as shall comply with the applicable requirements of Rule 16b-3.

16. Amendment, Suspension, and Termination of the Plan.

(a) Amendment of the Plan. The Board or the Committee may at any time, or from time to time, amend the Plan in any respect; provided, that (i) except as otherwise provided in Section 4(b) hereof, no such amendment may make any change in any option theretofore granted which adversely affects the rights of any Participant and (ii) the Plan may not be amended in any way that will cause rights issued under the Plan to fail to meet the requirements for employee stock purchase plans as defined in Section 423 of the Code or any successor thereto. To the extent necessary to comply with Rule 16b-3 under the Exchange Act, Section 423 of the Code, or any other applicable law or regulation, the Company shall obtain shareholder approval of any such amendment.

(b) Suspension of the Plan. The Board or the Committee may, as of the close of any Exercise Date, suspend the Plan; provided, that the Board or Committee provides notice to the Participants at least five (5) business days prior to the suspension. The Board or Committee may resume the normal operation of the Plan as of any Exercise Date; provided further, that the Board or Committee provides notice to the Participants at least twenty (20) business days prior to the date of termination of the suspension period. A Participant shall remain a Participant in the Plan during any suspension period (unless he or she withdraws pursuant to Section 13(a)), however no options shall be granted or exercised, and no payroll deductions shall be made in respect of any Participant during the suspension period. The Plan shall resume its normal operation upon termination of a suspension period.

(c) Termination of the Plan. The Plan and all rights of Employees hereunder shall terminate on the earliest of:

(i) the Exercise Date that Participants become entitled to purchase a number of shares greater than the number of reserved shares remaining available for purchase under the Plan;

(ii) such date as is determined by the Board in its discretion; or

(iii) the last Exercise Date immediately preceding the tenth (10th) anniversary of the Plan’s effective date.

In the event that the Plan terminates under circumstances described in Section 16(c)(i) above, reserved shares remaining as of the termination date shall be sold to Participants on a pro rata basis, based on the relative value of their cash account balances in the Plan as of the termination date.

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17. Sub-Plans. The Committee may adopt and amend stock purchase sub-plans with respect to employees employed outside the United States with such provisions as the Committee may deem appropriate to conform to local laws, practices and procedures. All such sub-plans shall be subject to the limitations on the amount of stock that may be issued under the Plan and, except to the extent otherwise provided in such plans, shall be subject to all of the provisions set forth herein.

18. Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person or agent, designated by the Company for the receipt thereof.

19. Expenses of the Plan. All costs and expenses incurred in administering the Plan shall be paid by the Company, except that any stamp duties or transfer taxes applicable to participation in the Plan may be charged to the account of such Participant by the Company.

20. No Employment Rights. The Plan does not, directly or indirectly, create any right for the benefit of any employee or class of employees to purchase any shares under the Plan, or create in any employee or class of employees any right with respect to continuation of employment by the Company or any Subsidiary, and it shall not be deemed to interfere in any way with the right of the Company or any Subsidiary to terminate, or otherwise modify, an employee’s employment at any time.

21. Applicable Law. The internal laws of the State of New York shall govern all matters relating to the Plan except to the extent (if any) superseded by the laws of the United States.

22. Additional Restrictions of Rule 16b-3. The terms and conditions of options granted hereunder to, and the purchase of shares by, persons subject to Section 16 of the Exchange Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed to contain, and such options shall contain, and the Ordinary Shares issued upon exercise thereof shall be subject to, such additional conditions and restrictions as may be required by Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.

23. Effective Date. The Plan became effective on March 8, 2010.

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EX-10.2

Exhibit 10.2

FORM OF

SENSATA TECHNOLOGIES HOLDING N.V.

2010 EQUITY INCENTIVE PLAN

ARTICLE I

ESTABLISHMENT AND PURPOSE; ADMINISTRATION

1.1 Establishment. Sensata Technologies Holding N.V., a public limited liability company incorporated under the laws of the Netherlands (the “Company”), hereby establishes an equity incentive plan to be known as the “Sensata Technologies N.V. 2010 Equity Incentive Plan” (the “Plan”). The Plan shall become effective as of March 8, 2010 (the “Effective Date”) concurrent with its adoption by the Company’s management board (the “Board”) on such date.

1.2 Purpose. The Plan is intended to promote the long-term growth and profitability of the Company and its Subsidiaries by providing those Persons who are or will be involved in the Company’s and its Subsidiaries’ growth with an opportunity to acquire an ownership interest in the Company, thereby encouraging such Persons to contribute to and participate in the success of the Company and its Subsidiaries. Under the Plan, the Company may make Awards (as defined in Section 3.1) to such present and future officers, directors, employees (including Persons to whom an offer of employment has been extended), consultants, and advisors of the Company or its Subsidiaries as may be selected in the sole discretion of the Committee (collectively, “Participants”). Participation in the Plan is voluntary.

1.3 Administration. The Plan shall be administered by the Committee; provided that the Board may, in its discretion, at any time and from time to time, resolve that certain specified actions or determinations of the Committee shall require the approval of the Board, in which case, solely with respect to such specified actions and determinations, the term “Committee” shall be deemed to mean the recommendation of the Committee, as approved by the Board, for all purposes herein; and provided further that the Board may, in its discretion, at any time and from time to time, resolve to administer the Plan, in which case the term “Committee” shall be deemed to mean the Board for all purposes herein. The Committee shall have the power and authority to prescribe, amend and rescind rules and procedures governing the administration of this Plan, including, but not limited to the full power and authority (a) to interpret the terms of this Plan, the terms of any Awards made under this Plan, and the rules and procedures established by the Committee governing any such Awards, (b) to determine the rights of any person under this Plan, or the meaning of requirements imposed by the terms of this Plan or any rule or procedure established by the Committee, (c) to select Participants for Awards under the Plan, (d) to determine the number of Ordinary Shares to be covered by each Award granted under this Plan, (e) to determine the amount of cash to be covered by each Award granted under his Plan, (f) to determine whether, to what extent and under what circumstances grants of Options and other Awards under the Plan are to operate on a tandem basis and/or in conjunction with or apart from other awards made by the Company outside of this Plan; (g) to determine whether and under what circumstances an Option may be settled in cash, Ordinary Shares and/or Restricted Securities under Section 4.6(a), (h) to determine whether an Option is an Incentive Stock Option or Non-Qualified Stock Option, (i) to establish performance and vesting standards, (j) to impose such limitations, restrictions and conditions upon such Awards as it shall deem appropriate, (k) to modify, extend or renew an Award, provided, however, that such action does

not subject the Award to Section 409A of the Code without the consent of the Participant, and does not disqualify an awarded intended to be performance-based under Section 162(m) from being performance-based, (l) to adopt, amend and rescind administrative guidelines and other rules and regulations relating to the Plan, (m) to correct any defect or omission or reconcile any inconsistency in the Plan, and (n) to make all other determinations and take all other actions necessary or advisable for the implementation and administration of the Plan, subject to such limitations as may be imposed by the Code or other applicable law and except as specifically provided by this Plan. Each action of the Board shall be binding on all persons. The Board may, to the extent permissible by law, delegate any of its authority hereunder to such persons as it deems appropriate, so long as such delegation does not result in awards intended to be performance-based from being disqualified as such under Section 162(m). The expenses of the Plan shall be borne by the Company. The Company shall not be required to establish any special or separate fund or make any other segregation of assets to assume the obligations pursuant to any Award made under the Plan, and rights to any payment in connection with such Awards shall be no greater than the rights of the Company’s general creditors.

ARTICLE II

DEFINITIONS

As used in this Plan, unless otherwise specified in an Award Agreement, the following terms shall have the meanings set forth below:

“Affiliate” of a Person means any other Person, entity or investment fund controlling, controlled by, or under common control with such Person and, in the case of a Person which is a partnership, any partner of such Person.

“Award Agreement” means a notice from the Company to a Participant, or a written agreement between the Company and a Participant, in either case setting forth the terms, conditions, and limitations applicable to an Award, as amended from time to time. All Award Agreements shall be deemed to include all of the terms and conditions of the Plan, except to the extent otherwise approved by the Board and set forth in an Award Agreement.

“Award Securities” means, with respect to a Participant, any Restricted Securities issued to such Participant hereunder, any Ordinary Shares issued to such Participant upon exercise of any Options granted hereunder, and any Ordinary Shares issued to such Participant in connection with any other Award made under the Plan. For all purposes of this Plan, Award Securities will continue to be Award Securities in the hands of any holder other than a Participant (except for the Company and purchasers pursuant to a Public Sale), and each such other holder of Award Securities will succeed to all rights and obligations attributable to such Participant as a holder of Award Securities hereunder. Award Securities will also include Ordinary Shares issued with respect to Award Securities by way of a security split, security dividend or other recapitalization.

“Cause” means, for any Participant, the meaning given to such term in an employment or other similar agreement entered into by such Participant and the Company or any of its Affiliates on or after the Effective Date and approved by the Board (which meaning shall continue to apply whether or not such agreement ceases to be effective, unless and until Participant subsequently enters into a superseding employment or other similar agreement that contains a definition of

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“Cause”, in which case the meaning in such superseding agreement shall apply), or, in the absence of any such agreement, it shall mean (i) the commission of, or indictment for, a felony or a crime involving moral turpitude or the commission of any other act or any omission to act involving dishonesty, disloyalty or fraud with respect to the Company or any of its Subsidiaries or any of their customers or suppliers, (ii) failure to perform duties as reasonably directed by the Board or such Participant’s supervisor(s), if any, (iii) gross negligence or willful misconduct with respect to the Company or any of its Subsidiaries, (iv) Detrimental Activity, or (v) any other material breach of the terms of this Plan, an Award Agreement or any other agreement with the Company or any of its Subsidiaries to which such Participant is a party.

“Change in Control” means (i) any transaction or series of transactions in which any Person (whether by merger, sale of securities, recapitalization, or reorganization) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act or any successor thereto), directly or indirectly, of securities of the Company representing more than 50% of the total voting power in the Company, provided that the acquisition of additional securities by any Person that owns more than 50% of the voting power prior to such acquisition of additional securities shall not be a Change in Control, (ii) during any twelve-month period, individuals who at the beginning of such period constitute the Board and any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election was previously so approved, cease for any reason to constitute a majority thereof, (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in all or a portion of the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, and (iv) a sale or disposition of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis; provided, that in any instance where an Award is treated as deferred compensation within the meaning of Section 409A of the Code, “Change in Control” shall mean a “change in control” as defined in Section 409A(a)(2)(v) of the Code and the guidance issued thereunder.

“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time.

“Committee” means the Compensation Committee of the Board.

“Detrimental Activity” means any breach of any confidentiality, non-compete, non-solicitation or similar agreement with the Company or any of its Subsidiaries (in each case including any such provision included in an Award Agreement or other agreement), or any arrangement dealing with ownership or protection of the Company’s and its Subsidiaries’ proprietary rights.

“Disability” means, with respect to any Participant, the meaning given to such term in an employment or other similar agreement entered into by such Participant and the Company or any of its Affiliates on or after the Effective Date and approved by the Board (which meaning shall

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continue to apply whether or not such agreement ceases to be effective, unless and until Participant subsequently enters into a superseding employment or other similar agreement that contains a definition of “Disability”, in which case the meaning in such superseding agreement shall apply), or, in the absence of any such agreement, it shall mean such Participant’s incapacity due to physical or mental illness, which incapacity makes Participant eligible to receive disability benefits under the Company’s or its Subsidiaries’ long-term disability plans or any equivalent thereof; provided, that in any instance where an Award is treated as “deferred compensation” within the meaning of Section 409A of the Code, “Disability” shall be interpreted consistently with the meaning of Section 409A(a)(2)(C) of the Code and guidance issued thereunder.

“Dutch Financial Supervision Act” means the Dutch Act on the Financial Supervision (Wet op het financieel toezicht), including the rules and regulations promulgated thereunder.

“Fair Market Value” of an Ordinary Share of the Company means, as of the date in question, the officially-quoted closing selling price of the Ordinary Shares (or if no selling price is quoted, the bid price) on the principal securities exchange or market on which the Ordinary Shares are then listed for trading (including, for this purpose, the New York Stock Exchange or the Nasdaq National Market) (the “Market”) for the applicable trading day or, if the Ordinary Shares are not then listed or quoted in the Market, the Fair Market Value shall be the fair value of the Ordinary Shares determined in good faith by the Board using any reasonable method; provided, however, that when shares received upon exercise of an Option are immediately sold in the open market, the net sale price received may be used to determine the Fair Market Value of any shares used to pay the exercise price or applicable withholding taxes and to compute the withholding taxes.

“Incentive Stock Option” means an option conforming to the requirements of Section 422 of the Code and/or any successor thereto.

“Initial Public Offering” means the initial public offering and sale of Ordinary Shares pursuant to an effective registration statement under the Securities Act.

“Non-Qualified Stock Option” means any Option awarded under the Plan that is not an Incentive Stock Option.

“Ordinary Shares” means the Company’s Ordinary Shares, par value €0.01 per share, or in the event that the outstanding shares of ordinary share capital are hereafter recapitalized, converted into or exchanged for different stock or securities of the Company, such other stock or securities.

“Performance Goals” means goals established by the Committee as contingencies for Awards to vest and/or become exercisable or distributable based on one or more of the performance goals set forth in Exhibit A hereto.

“Performance Period” means the designated period during which the Performance Goals must be satisfied with respect to the Award to which the Performance Goals relate.

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“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a government or any branch, department, agency, political subdivision or official thereof.

“Public Sale” means any sale pursuant to a registered public offering under the Dutch Financial Supervision Act, the Securities Act, or any similar securities law applicable outside of the Netherlands or the United States, or any sale to the public through a broker, dealer or market maker pursuant to Rule 144 promulgated under the Securities Act or any similar exemption under the Dutch Financial Supervision Act or other securities law applicable outside of the United States.

“Securities Act” means the Securities Act of 1933, as amended from time to time.

“Subsidiary” means any corporation, partnership, limited liability company, or other entity in which the Company owns, directly or indirectly, stock or other equity securities or interests possessing 50% or more of the total combined voting power of such entity.

“Termination Date” means the date on which a Participant is no longer employed by the Company or any of its Subsidiaries for any reason. For the avoidance of doubt, a Participant’s Termination Date shall be considered to be the last date of his actual and active employment with the Company or one of its Subsidiaries, whether such day is selected by agreement with the Participant or unilaterally by the Company or such Subsidiary and whether advance notice is or is not given to the Participant; no period of notice that is or ought to have been given under applicable law in respect of the termination of employment will be taken into account in determining entitlement under the Plan.

“Transfer” means any direct or indirect sale, transfer, assignment, pledge, encumbrance or other disposition (whether with or without consideration and whether voluntary or involuntary or by operation of law, including to the Company or any of its Subsidiaries) of any interest.

ARTICLE III

AWARDS AND ELIGIBILITY

3.1 Awards. Awards under the Plan (“Awards”) may be granted in any of the following forms: (i) options to purchase Ordinary Shares pursuant to the Plan (“Options”), (ii) rights pursuant to an Award granted under Article V herein (“Stock Appreciation Rights”), (iii) Ordinary Shares pursuant to the Plan and subject to certain restrictions under Article VI herein (“Restricted Securities”), (iv) Awards granted to a Participant pursuant to the Plan contingent upon achieving certain Performance Goals (“Performance Awards”), (v) Awards granted pursuant to the Plan which are valued in whole or in part by reference to, or are payable in or otherwise based on, Ordinary Shares, including, without limitation, an Award valued by reference to an Affiliate (“Other Stock-Based Awards”), (vi) other cash-based Awards pursuant to the Plan which are payable in cash at such time or times and subject to the terms and conditions as determined by the Committee in its sole discretion (“Other Cash-Based Awards”) and (vii) any combination thereof. Unless the Committee determines otherwise, each grant of any Awards shall be evidenced by a written Award Agreement containing such restrictions, terms and conditions, if any, as the Committee may require; provided that if there is any conflict

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between any provision of the Plan and any provision approved by the Committee and expressly set forth in an Award Agreement, such express provisions of the Award Agreement shall govern.

3.2 Maximum Securities Available.

(a) Subject to adjustments as provided in Section 3.2(c), an aggregate of 5,000,000 Ordinary Shares may be issued pursuant to the Plan. Such Ordinary Shares may be in whole or in part authorized and unissued or held by the Company as treasury shares. If any Award under the Plan expires or terminates unexercised, becomes unexercisable or is forfeited as to any Ordinary Shares, then such unpurchased, forfeited, tendered or withheld Ordinary Shares may thereafter be available for further Awards under the Plan as the Committee shall determine. Without limiting the generality of the foregoing provisions of this Section 3.2(a) or any other section of this Plan, the Committee may, at any time or from time to time, and on such terms and conditions (that are consistent with and not in contravention of the other provisions of this Plan) as the Committee may, in its sole discretion, determine, enter into agreements (or take other actions with respect to the Awards) for new Awards containing terms (including exercise prices) more (or less) favorable than the outstanding Awards. The maximum number of Incentive Stock Options that may be issued pursuant to the Plan shall be 5,000,000.

(b) Individual Participant Limitations. To the extent required by Section 162(m) of the Code for Awards under the Plan intended to qualify as “performance-based compensation,” (i) the Committee shall not grant to any one Participant, in any one calendar year, Options or Stock Appreciation Rights or Restricted Securities, or Other Stock-Based Awards for which the grant of such Award is subject to the attainment of Performance Goals, to purchase a number of Ordinary Shares in excess of 50% of the total number of Ordinary Shares authorized under the Plan pursuant to Section 3.2(a), and (ii) the maximum value of a cash payment made under an Other Cash-Based Award to any one Participant in any one calendar year shall not exceed $5,000,000, in each case, unless otherwise provided for in an Award Agreement.

(c) Adjustments.

(i) In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation, distribution of assets, or any other change in the corporate structure or shares of the Company, the Committee shall make such adjustment as it deems appropriate, in its sole discretion, in the number and kind of Ordinary Shares or other property available for issuance under the Plan (including, without limitation, the total number of Ordinary Shares available for issuance under the Plan pursuant to Section 3.2(a)), in the number and kind of Options, Stock Appreciation Rights, Restricted Securities, Ordinary Shares or other property covered by Awards previously made under the Plan, and in the exercise price of outstanding Options and Stock Appreciation Rights. Any such adjustment shall be final, conclusive and binding for all purposes of the Plan. In the event of any merger, consolidation or other reorganization in which the Company is not the surviving or continuing corporation or in which a Change in Control is to occur, all of the Company’s obligations regarding Awards that were granted hereunder and that are outstanding on the date of such event shall, on such terms as may be approved by the Committee prior to such event, be assumed by the surviving or continuing corporation or canceled in exchange for property (including cash).

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(ii) Without limitation of the foregoing, in connection with any transaction of the type specified by clause (iii) of the definition of a Change in Control in Article II, the Committee may, in its discretion, (i) cancel any or all outstanding Options under the Plan in consideration for payment to the holders thereof of an amount equal to the portion of the consideration that would have been payable to such holders pursuant to such transaction if their Options had been fully exercised immediately prior to such transaction, less the aggregate exercise price that would have been payable therefor, or (ii) if the amount that would have been payable to the Option holders pursuant to such transaction if their Options had been fully exercised immediately prior thereto would be equal to or less than the aggregate exercise price that would have been payable therefor, cancel any or all such Options for no consideration or payment of any kind. Payment of any amount payable pursuant to the preceding sentence may be made in cash or, in the event that the consideration to be received in such transaction includes securities or other property, in cash and/or securities or other property in the Committee’s discretion.

3.3 Eligibility.

(a) General Eligibility. The Committee may, from time to time, select the Participants who shall be eligible to participate in the Plan and the Awards to be made to each such Participant. The Committee may consider any factors it deems relevant in selecting Participants and in making Awards to such Participants. The Committee’s determinations under the Plan (including, without limitation, determinations of which Persons are to receive Awards and in what amount) need not be uniform and may be made by it selectively among Persons who are eligible to receive Awards under the Plan.

(b) Incentive Stock Options. Notwithstanding the foregoing, only employees of the Company and its Subsidiaries (as defined for this purpose in Section 424(f) of the Code or any successor thereto) are eligible to be granted Incentive Stock Options under the Plan. Eligibility for the grant of an Incentive Stock Option and actual participation in the Plan shall be determined by the Committee in its sole discretion.

(c) Securities Laws. In connection with the grant of any Awards under the Plan or any issuance of any Award Securities, the Company will comply with applicable securities laws, including, to the extent applicable, the Securities Act and the Dutch Financial Supervision Act, and the rules and regulations promulgated thereunder. In furtherance of the foregoing, the Committee may, in its sole discretion, establish certain conditions for the grant of any Awards under the Plan including, without limitation, the time schedule upon which Awards may be granted, and the Committee will take into account any such established conditions, to the extent applicable, when granting or making any other determinations with respect to Awards under the Plan.

3.4 No Right to Continued Employment; No Entitlement to Future Awards. Nothing in this Plan or (in the absence of an express provision to the contrary) in any Award Agreement, as applicable, shall confer on any Participant any right to continue in the employment of the Company or its Subsidiaries or interfere in any way with the right of the Company or its Subsidiaries to terminate such Participant’s employment at any time for any reason or to continue such Participant’s present (or any other) rate of compensation. The grant of an Award to any

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Participant shall not create any rights in such Participant to any subsequent Awards by the Company, no Award hereunder shall be considered a condition of such Participant’s employment, and no profit with respect to an Award shall be considered part of such Participant’s salary or compensation under any severance statute or other applicable law.

3.5 Exchange of Prior Awards. In connection with any new Award, the Committee shall have the right, at its discretion, to condition a Participant’s receipt of such new Award on the requirement that such Participant return to the Company Awards previously granted to him or her under the Plan. Subject to the provisions of the Plan, such new Award shall be upon such terms and conditions as are specified by the Committee at the time the new Award is made.

ARTICLE IV

OPTIONS

4.1 Options. The Committee shall have the right and power to grant to any Participant, at any time prior to the termination of this Plan, Options in such quantity, at such price, on such terms and subject to such conditions that are consistent with this Plan and established by the Committee. The Committee may choose to grant, in its sole discretion, Incentive Stock Options and/or Non-Qualified Stock Options. All Options granted under this Plan shall be in the form described in this Article IV, or in such other form or forms as the Committee may determine, and shall be subject to such additional terms and conditions and evidenced by Award Agreements, as shall be determined from time to time by the Committee. Except as otherwise set forth in an Award Agreement, Options shall be subject to all of the terms and conditions contained in this Plan.

4.2 Incentive Stock Options. It is the Company’s intent that Non-Qualified Stock Options granted under the Plan not be classified as Incentive Stock Options, that Incentive Stock Options be consistent with and contain or be deemed to contain all provisions required under Section 422 of the Code and any successor thereto, and that any ambiguities in construction be interpreted in order to effectuate such intent. If an Incentive Stock Option granted under the Plan does not qualify as such for any reason, then to the extent of such non-qualification, the Option represented thereby shall be regarded as a Non-qualified Stock Option duly granted under the Plan, provided that such Option otherwise meets the Plan’s requirements for Non-qualified Stock Options

4.3 Vesting of Options.

(a) The Committee shall determine the terms and conditions upon which each Option becomes exercisable which may but need not include, without limitation, time vesting and/or performance vesting. Options shall be exercisable by a Participant only to the extent that they are vested. Except as provided for in Section 4.3(b), Options shall vest only so long as a Participant remains employed by the Company or one of its Subsidiaries.

(b) Vesting on Change in Control. Unless otherwise specified in an Award Agreement, in the event of a Change in Control, if a Participant is terminated without Cause within 24 months thereafter, all of such Participant’s Options shall be considered 100% vested.

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4.4 Normal Expiration. The term during which each Option may be exercised shall be determined by the Committee, but if required by the Code and except as otherwise provided herein, no Option shall be exercisable in whole or in part more than ten years from the date it is granted, and no Incentive Stock Option granted to a Participant who at the time of the grant owns more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries shall be exercisable more than five years from the date it is granted. All rights to purchase Ordinary Shares pursuant to an Option shall, unless sooner terminated, expire at the date designated by the Committee.

4.5 Expiration on Termination. Unless the Committee determines otherwise, if a Participant ceases to be employed by the Company and its Subsidiaries for any reason, then the portion of such Participant’s Options that have not fully vested as of the Termination Date shall expire at such time. Unless the Committee determines otherwise, the portion of a Participant’s Options that are not subject to vesting or that have fully vested as of such Participant’s Termination Date shall expire (i) 60 days after the Termination Date if such Participant ceases to be employed by the Company and its Subsidiaries for any reason other than termination with Cause or due to death or Disability, (ii) on the Termination Date if such Participant’s employment is terminated with Cause, and (iii) in the event such Participant dies or suffers a Disability, on the date that is six months after the date on which such Participant’s employment ceases due to such Participant’s death or Disability.

4.6 Exercise.

(a) Procedure for Exercise. Unless otherwise specified in an Award Agreement, at any time after all or any portion of a Participant’s Options have become vested and prior to their expiration, a Participant may exercise all or any specified portion of such vested Options by delivering written notice of exercise specifically identifying the particular Options to the third party service provider that has been appointed by the Company to administer the Awards (an “Exercise Notice”), together with (i) a written acknowledgment that such Participant has read and has been afforded an opportunity to ask questions of management of the Company regarding all financial and other information provided to such Participant regarding the Company and (ii) payment in full of the exercise price, in accordance with Section 4.6(b) or as otherwise determined by the Committee; provided that, for the avoidance of doubt, any participant who is also subject to Section 16 of the of the Securities Exchange Act of 1934, as amended (the “1934 Act”) must further comply with the notice procedures of the Company’s insider trading and disclosure policies as in effect from time to time.

(b) Payment.

(i) Unless the Committee determines otherwise, payment shall be made (A) in cash (including check, bank draft, money order or wire transfer of immediately available funds), (B) by delivery of outstanding Ordinary Shares with a Fair Market Value on the date of exercise equal to the aggregate exercise price payable with respect to the Options’ exercise, (C) to the extent permitted by applicable law, by simultaneous sale through a broker reasonably acceptable to the Committee of Ordinary Shares acquired on exercise, as permitted under Regulation T of the Federal Reserve Board, (D) by authorizing the Company to withhold from issuance a number of Ordinary Shares issuable upon exercise of the options which, when

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multiplied by the Fair Market Value of an Ordinary Share on the date of exercise, is equal to the aggregate exercise price payable with respect to the Options so exercised or (E) by any combination of the foregoing.

(ii) In the event a Participant elects to pay the exercise price payable with respect to an Option pursuant to clause (B) of Section 4.6(b)(i) above, (A) only a whole number of Ordinary Share(s) (and not fractional Ordinary Shares) may be tendered in payment, (B) such Participant must present evidence acceptable to the Company that he or she has owned any such Ordinary Shares tendered in payment of the exercise price (and that such tendered Ordinary Shares have not been subject to any substantial risk of forfeiture) for at least six months prior to the date of exercise, and (C) Ordinary Shares must be delivered to the Company. Delivery for this purpose may, at the election of the Participant, be made either by (A) physical delivery of the certificate(s) for all such Ordinary Shares tendered in payment of the price, accompanied by duly executed instruments of transfer in a form acceptable to the Company, or (B) direction to the Participant’s broker to transfer, by book entry, of such Ordinary Shares from a brokerage account of the Participant to a brokerage account specified by the Company. When payment of the exercise price is made by delivery of Ordinary Shares, the difference, if any, between the aggregate exercise price payable with respect to the Option being exercised and the Fair Market Value of the Ordinary Shares tendered in payment (plus any applicable taxes) shall be paid in cash. No Participant may tender Ordinary Shares having a Fair Market Value exceeding the aggregate exercise price payable with respect to the Option being exercised (plus any applicable taxes).

(iii) In the event a Participant elects to pay the exercise price payable with respect to an Option pursuant to clause (D) of Section 4.6(b)(i) above, only a whole number of Ordinary Share(s) (and not fractional Shares) may be withheld in payment. When payment of the exercise price is made by withholding of Ordinary Shares, the difference, if any, between the aggregate exercise price payable with respect to the Option being exercised and the Fair Market Value of the Ordinary Shares withheld in payment (plus any applicable taxes) shall be paid in cash. No Participant may authorize the withholding of Ordinary Shares having a Fair Market Value exceeding the aggregate exercise price payable with respect to the Option being exercised (plus any applicable taxes). Any withheld Ordinary Shares shall no longer be issuable under such Option.

(c) Exercise Price. The exercise price of a Participant’s Options shall be specified in such Participant’s Award Agreement. Such exercise price shall be denominated in U.S. Dollars and determined based upon the currency exchange rate between Euros and U.S. Dollars as published in the Wall Street Journal on the date of grant of such Options (or at such other time as specified in an Award Agreement). The price per Ordinary Share deliverable upon the exercise of each Option (“exercise price”) shall not be less than 100% of the Fair Market Value of an Ordinary Share as of the date of grant of the Option, and in the case of the grant of any Incentive Stock Option to a Participant who, at the time of the Grant, owns more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the exercise price may not be less than 110% of the Fair Market Value of a share of Common Stock as of the date of grant of the Option, in each case unless otherwise determined by the Committee and permitted by Section 422 of the Code or any successor thereto.

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(d) Limitation on Repricing. To the extent required by applicable law or by rules and regulations of any exchange on which the Ordinary Shares are listed or traded, unless such action is approved by the Company’s stockholders: (1) no outstanding Option granted under the Plan may be amended to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Option (other than adjustments pursuant to Section 3.2(c)(i) and (2) the Committee may not cancel any outstanding Option (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan covering the same or a different number of Ordinary Shares and having an exercise price per share lower than the then-current exercise price per share of the cancelled Option.

4.7 Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined as of the time of grant) of Ordinary Shares with respect to which Incentive Stock Options are exercisable for the first time by an eligible Participant during any calendar year under this Plan and/or any other stock option plan of the Company, any Subsidiary or any Parent (as defined for this purpose in Section 424 of the Code or any successor thereto) exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options. Should any provision of this Plan not be necessary in order for the Options to qualify as Incentive Stock Options, or should any additional provisions be required, the Committee may amend this Plan accordingly, without the necessity of obtaining the approval of the stockholders of the Company.

4.8 Deferred Delivery of Award Securities. The Committee may in its discretion permit Participants to defer delivery of Award Securities acquired pursuant to a Participant’s exercise of an Option in accordance with the terms and conditions established by the Committee in the applicable Award Agreement, which shall be intended to comply with the requirements of Section 409A of the Code.

4.9 Rights as a Securityholder. Unless the Committee determines otherwise, a Participant holding Options shall have no rights as a securityholder with respect to any Award Securities issuable upon exercise thereof until the earlier of the date on which such Award Securities are identified on the share register(s) of the Company and the date on which a certificate is issued to such Participant representing such Award Securities. Except as otherwise expressly provided in the Plan or in any Award Agreement, no adjustment in respect of any Award Securities shall be made for cash dividends or other rights for which the record date is prior to the earlier of the date on which such Award Securities are identified on the share register(s) of the Company and the date on which a certificate is issued to such Participant representing such Award Securities.

ARTICLE V

STOCK APPRECIATION RIGHTS

5.1 Stock Appreciation Rights. The Committee shall have the right and power to grant to any Participant, at any time prior to the termination of this Plan, Stock Appreciation Rights, whether or not in tandem with Options, in such quantity, at such price, on such terms and subject to such conditions that are consistent with this Plan and established by the Committee. Stock Appreciation Rights granted under this Plan shall be in the form described in this Article V, or in such other form or forms as the Committee may determine, and shall be subject to such additional terms and conditions and evidenced by Award Agreements, as shall be determined

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from time to time by the Committee. Except as otherwise set forth in an Award Agreement, Stock Appreciation Rights shall be subject to all of the terms and conditions contained in this Plan.

5.2 Vesting of Stock Appreciation Rights.

(a) The Committee shall determine the terms and conditions upon which each Stock Appreciation Rights becomes exercisable which may but need not include, without limitation, time vesting and/or performance vesting. Stock Appreciation Rights shall be exercisable by a Participant only to the extent that they are vested. Except as provided for in Section 5.2(b), Stock Appreciation Rights shall vest only so long as a Participant remains employed by the Company or one of its Subsidiaries.

(b) Vesting on Change in Control. Unless otherwise specified in an Award Agreement, in the event of a Change in Control, if a Participant is terminated without Cause within 24 months thereafter, all of such Participant’s Stock Appreciation Rights shall be considered 100% vested.

5.3 Normal Expiration. The term during which each Stock Appreciation Right may be exercised shall be determined by the Committee, but if required by the Code and except as otherwise provided herein, no Stock Appreciation Right shall be exercisable in whole or in part more than ten years from the date it is granted.

5.4 Expiration on Termination. Unless the Committee determines otherwise, if a Participant ceases to be employed by the Company and its Subsidiaries for any reason, then the portion of such Participant’s Stock Appreciation Rights that have not fully vested as of the Termination Date shall expire at such time. Unless the Committee determines otherwise, the portion of a Participant’s Stock Appreciation Rights that are not subject to vesting or that have fully vested as of such Participant’s Termination Date shall expire (i) 60 days after the Termination Date if such Participant ceases to be employed by the Company and its Subsidiaries for any reason other than termination with Cause or due to death or Disability, (ii) on the Termination Date if such Participant’s employment is terminated with Cause, and (iii) in the event such Participant dies or suffers a Disability, on the date that is six months after the date on which such Participant’s employment ceases due to such Participant’s death or Disability.

5.5 Exercise; Payment. Stock Appreciation Rights may be exercised in whole or in part at any time in accordance with the applicable Award Agreement. Unless otherwise specified in an Award Agreement, Participant shall be entitled to receive, for each right exercised, up to, but no more than, an amount in cash and/or Ordinary Shares (as chosen by the Board in its sole discretion) equal in value to the excess of the Fair Market Value of one Ordinary Share on the date that the right is exercised over the Fair Market Value of one Ordinary Share on the date that the right was awarded to the Participant.

5.6 Limitation on Repricing. To the extent required by applicable law or by rules and regulations of any exchange on which the Ordinary Shares are listed or traded, unless such action is approved by the Company’s stockholders: (1) no outstanding Stock Appreciation Right granted under the Plan may be amended to provide an exercise price per share that is lower than the

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then-current exercise price per share of such outstanding Stock Appreciation Right (other than adjustments pursuant to Section 3.2(c)(i) and (2) the Committee may not cancel any outstanding Stock Appreciation Right (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan covering the same or a different number of Ordinary Shares and having an exercise price per share lower than the then-current exercise price per share of the cancelled Stock Appreciation Right.

5.7 Limited Stock Appreciation Rights. The Committee may, in its sole discretion, grant Stock Appreciation Rights either as a general Stock Appreciation Right or as a Limited Stock Appreciation Right. Limited Stock Appreciation Rights may be exercised only upon the occurrence of a Change in Control or such other event as the Committee may, in its sole discretion, designate at the time of grant or thereafter. Upon the exercise of Limited Stock Appreciation Rights, except as otherwise provided in an Award Agreement, the Participant shall receive in cash and/or Ordinary Shares, as determined by the Committee, an amount equal to the amount set forth in Section 5.5.

5.8 Other Terms and Conditions. The Committee may include a provision in an Award Agreement providing for the automatic exercise of a Stock Appreciation Right on a cashless basis on the last day of the term of such Stock Appreciation Right if the Participant has failed to exercise the Stock Appreciation Right as of such date, with respect to which the Fair Market Value of the Ordinary Shares underlying the Stock Appreciation Right exceed the exercise price of such Stock Appreciation Right on the date of expiration of such Stock Appreciation Right, subject to Section 12.4. Stock Appreciation Rights may contain such other provisions, which shall not be inconsistent with any of the terms of the Plan, as the Committee shall deem appropriate.

ARTICLE VI

RESTRICTED SECURITIES

6.1 Restricted Securities. The Committee shall have the right and power to grant to any Participant, at any time prior to the termination of this Plan, Restricted Securities in such quantity, at such price, on such terms and subject to such conditions that are consistent with this Plan and established by the Committee. Restricted Securities granted under this Plan shall be in the form described in this Article VI, or in such other form or forms as the Committee may determine, and shall be subject to such additional terms and conditions and evidenced by Award Agreements, as shall be determined from time to time by the Committee. Except as otherwise set forth in an Award Agreement, Restricted Securities shall be subject to all of the terms and conditions contained in this Plan.

6.2 Issuance of Restricted Securities. The Committee shall have the right and power to issue Restricted Securities to any Participant, at such prices as may be established by the Committee in its discretion, which prices, in respect of Ordinary Shares, shall not be less than the nominal values of such Ordinary Shares. The consideration for any such issue (if any) shall be cash, unless otherwise determined by the Committee.

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6.3 Vesting of Restricted Securities.

(a) The Committee shall determine the terms and conditions upon which each Restricted Security vests, which may but need not include, without limitation, time vesting and/or performance vesting; provided, however, that in no event shall any Restricted Security granted to an employee of the Company or any of its Subsidiaries vest in fewer than three years (in the case of a time-vesting award), or one year (in the case of a performance-vesting award).

(b) Vesting on Change in Control. Unless otherwise specified in an Award Agreement, in the event of a Change in Control, if a Participant is terminated without Cause within 24 months thereafter, all of such Participant’s Restricted Securities shall be considered 100% vested.

6.4 Restricted Security Certificates. If the Restricted Securities are to be certificated under the terms of the Company’s organizational documents, unless otherwise specified in an Award Agreement, the Company shall issue, in the name of each Participant to whom Restricted Securities have been granted or sold, certificates representing the total number of Restricted Securities granted or sold to such Participant, as soon as reasonably practicable after such grant or sale. The Company shall hold such certificates for the Participant’s benefit, unless otherwise specified in an Award Agreement, until such Restricted Securities become freely transferable, at which time the Company shall deliver such certificates (free of all such transferability restrictions) to the Participant.

6.5 Expiration on Termination.

(a) Unless the Committee determines otherwise, if a Participant ceases to be employed by the Company and its Subsidiaries for any reason, then the portion of such Participant’s Restricted Securities that are not subject to vesting or that have not fully vested as of the Termination Date shall be forfeited at such time. The portion of a Participant’s Restricted Securities that have fully vested as of such Participant’s Termination Date shall be forfeited on the Termination Date only if such Participant’s employment is terminated with Cause.

(b) Reimbursement of Consideration. In the instance that the Participant paid any consideration to the Company in connection with the issuance of any portion of the Participant’s Restricted Securities and if any of such Restricted Securities are forfeited pursuant to Section 6.5(a), unless otherwise specified in an Award Agreement, the Company shall reimburse the Participant for the lesser of (i) the amount of consideration paid for the forfeited Restricted Securities and (ii) the Fair Market Value of the forfeited Restricted Securities on the Termination Date.

(c) Rights of a Participant. Unless the Committee determines otherwise, any Participant who holds Restricted Securities shall have the right to receive dividends and distributions, if any are declared, with respect to such Restricted Securities; provided, however, that any dividends or distributions in respect of unvested Restricted Securities will be withheld by the Company and will be delivered to the Participant only to the extent and at such time as such Restricted Securities become fully vested. Any Securities received by a Participant as a result of any such dividends or distributions shall be considered Restricted Securities and shall be subject to all of the restrictions contained in the Plan (including Section 6.4).

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ARTICLE VII

PERFORMANCE AWARDS

7.1 Performance Awards. The Committee shall have the right and power to grant to any Participant, at any time prior to the termination of this Plan, Performance Awards. The Committee may grant Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, as well as Performance Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code. If the Performance Award is payable in shares of Award Securities, such shares shall be transferable to the Participant only upon attainment of the relevant Performance Goal in accordance with Article VII. If the Performance Award is payable in cash, it may be paid upon the attainment of the relevant Performance Goals either in cash or in shares of Award Securities (based on the then current Fair Market Value of such shares), as determined by the Committee, in its sole and absolute discretion. Performance Awards granted under this Plan shall be in the form described in this Article VII, or in such other form or forms as the Committee may determine, and shall be subject to such additional terms and conditions and evidenced by Award Agreements, as shall be determined from time to time by the Committee. With respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall condition the right to payment of any Performance Award upon the attainment of objective Performance Goals established pursuant to Section 7.2(c).

7.2 Terms and Conditions. Performance Awards awarded pursuant to this Article VII shall be subject to the following terms and conditions:

(a) Earning of Performance Award. At the expiration of the applicable Performance Period, the Committee shall determine the extent to which the Performance Goals established pursuant to Section 7.2(c) are achieved and the percentage of each Performance Award that has been earned.

(b) Non-Transferability. Subject to the applicable provisions of the Award Agreement and the Plan, Performance Awards may not be Transferred during the Performance Period.

(c) Objective Performance Goals, Formulae or Standards. With respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall establish the objective Performance Goals for the earning of Performance Awards based on a Performance Period applicable to each Participant or class of Participants in writing prior to the beginning of the applicable Performance Period or at such later date as permitted under Section 162(m) of the Code and while the outcome of the Performance Goals are substantially uncertain. Such Performance Goals may incorporate, if and only to the extent permitted under Section 162(m) of the Code, provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances. To the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code,

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such provision shall be of no force or effect, with respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

(d) Dividends. Unless the Committee determines otherwise at the time of the Award, amounts equal to dividends declared during the Performance Period with respect to the number of Ordinary Shares covered by a Performance Award will not be paid to the Participant.

(e) Payment. Following the Committee’s determination in accordance with Section 7.2(a), the Company shall settle Performance Awards, in such form (including, without limitation, in Award Securities or in cash) as determined by the Committee, in an amount equal to such Participant’s earned Performance Awards. Notwithstanding the foregoing, the Committee may, in its sole discretion, award an amount less than the earned Performance Awards and/or subject the payment of all or part of any Performance Award to additional vesting, forfeiture and deferral conditions as it deems appropriate.

(f) Termination. Unless otherwise specified in an Award Agreement, if a Participant ceases to be employed by the Company and its Subsidiaries for any reason, then any unvested Performance Award will be forfeited.

(g) Vesting. Vesting of any Performance Award shall be determined by the Committee. Based on service, performance and/or such other factors or criteria, if any, as the Committee may determine, the Committee may, at or after grant, accelerate the vesting of all or any part of any Performance Award.

ARTICLE VIII

OTHER STOCK-BASED AND CASH-BASED AWARDS

8.1 Other Stock-Based Awards.

(a) The Committee shall have the right and power to grant to any Participant, at any time prior to the termination of this Plan, Other Stock Based Awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to Ordinary Shares, including but not limited to, Award Securities awarded purely as a bonus and not subject to restrictions or conditions, Award Securities in payment of the amounts due under an incentive or performance plan sponsored or maintained by the Company or an Affiliate, stock equivalent units, restricted stock units, and Awards valued by reference to book value of Ordinary Shares. Other Stock-Based Awards may be granted either alone or in addition to or in tandem with other Awards granted under the Plan.

(b) Subject to the provisions of the Plan, the Committee shall have authority to determine the Participants, to whom, and the time or times at which, such Awards shall be made, the number of Award Securities to be awarded pursuant to such Awards, and all other conditions of the Awards. The Committee may also provide for the grant of Award Securities under such Awards upon the completion of a specified Performance Period.

(c) The Committee may condition the grant or vesting of Other Stock-Based Awards upon the attainment of specified Performance Goals as the Committee may determine, in its sole discretion; provided that to the extent that such Other Stock-Based Awards are intended

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to comply with Section 162(m) of the Code, the Committee shall establish the objective Performance Goals for the grant or vesting of such Other Stock-Based Awards based on a Performance Period applicable to each Participant or class of Participants in writing prior to the beginning of the applicable Performance Period or at such later date as permitted under Section 162(m) of the Code and while the outcome of the Performance Goals are substantially uncertain. Such Performance Goals may incorporate, if and only to the extent permitted under Section 162(m) of the Code, provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances. To the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect, with respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

8.2 Terms and Conditions. Other Stock-Based Awards made pursuant to this Article VIII shall be subject to the following terms and conditions:

(a) Non-Transferability. Subject to the applicable provisions of the Award Agreement and the Plan, Award Securities subject to Awards made under this Article VIII may not be Transferred prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses.

(b) Dividends. Unless otherwise determined by the Committee at the time of Award, subject to the provisions of the Award Agreement and the Plan, the recipient of an Award under this Article VIII shall not be entitled to receive, currently or on a deferred basis, dividends or dividend equivalents with respect to the number of Ordinary Shares covered by the Award, as determined at the time of the Award by the Committee, in its sole discretion.

(c) Vesting. Any Award under this Article VIII and any Award Securities covered by any such Award shall vest or be forfeited to the extent so provided in the Award Agreement, as determined by the Committee, in its sole discretion.

(d) Price. Award Securities issued on a bonus basis under this Article VIII may be issued for no cash consideration. Award Securities purchased pursuant to a purchase right awarded under this Article VIII shall be priced, as determined by the Committee in its sole discretion.

8.3 Other Cash-Based Awards. The Committee may from time to time grant Other Cash-Based Awards to Participants in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by applicable law, as it shall determine in its sole discretion. Other Cash-Based Awards may be granted subject to the satisfaction of vesting conditions or may be awarded purely as a bonus and not subject to restrictions or conditions, and if subject to vesting conditions, the Committee may accelerate the vesting of such Awards at any time in its sole discretion. The grant of an Other Cash-Based Award shall not require a segregation of any of the Company’s assets for satisfaction of the Company’s payment obligation thereunder.

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ARTICLE IX

LISTING, REGISTRATION AND QUALIFICATION

9.1 Compliance with Laws. Each Award shall be subject to the requirement that if at any time the Committee shall determine, in its discretion, that the listing, registration or qualification of the securities subject to such Award upon any securities exchange or under any state or federal securities or other law or regulation or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to or in connection with the granting of such Award or the issue or purchase of securities thereunder, no such Award may be exercised or paid in Ordinary Shares in whole or in part unless such listing, registration, qualification, consent or approval (a “Required Listing”) shall have been effected or obtained and the holder of the Award will supply the Company with such certificates, representations and information as the Company shall request which are reasonably necessary or desirable in order for the Company to obtain such Required Listing, and shall otherwise cooperate with the Company in obtaining such Required Listing. In the case of officers and other Persons subject to Section 16(b) of the 1934 Act, or any similar securities law applicable outside of the United States, the Committee may at any time impose any limitations upon the exercise of an Award which, in the Committee’s discretion, are necessary or desirable in order to comply with Section 16(b) of the 1934 Act and the rules and regulations thereunder and any similar securities law applicable outside of the United States.

ARTICLE X

TRANSFERABILITY

10.1 Unless the Committee determines otherwise, no Award granted under the Plan shall be transferable by a Participant other than by will or the laws of descent and distribution; provided that, in the case of Restricted Securities granted under the Plan, such Restricted Securities shall be freely transferable following the time at which such restrictions shall have lapsed with respect to such Restricted Securities. Any attempted Transfer of an Award which is not specifically permitted under the Plan shall be null and void. Unless the Committee determines otherwise, an Award may be exercised only by the Participant to which it was granted; by his or her executor or administrator, the executor or administrator of the estate of any of the foregoing, or any Person to whom the Award is transferred by will or the laws of descent and distribution; or by his or her guardian or legal representative; or the guardian or legal representative of any of the foregoing; provided that Incentive Stock Options may be exercised by any guardian or legal representative only if permitted by the Code and any regulations thereunder. All provisions of this Plan and any applicable Award Agreement shall in any event continue to apply to any Award granted under the Plan (or any Award Securities received in respect of an Award) and transferred as permitted by this Article X, and any transferee of any such Award (or Award Securities) shall be bound by all provisions of this Plan and any applicable Award Agreement as and to the same extent as the applicable original grantee.

ARTICLE XI

DETRIMENTAL ACTIVITY

11.1 Unless the Committee determines otherwise, (i) in the event that a Participant engages in Detrimental Activity prior to any exercise, distribution or settlement of any Award,

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such Award shall thereupon terminate and expire, (ii) in the event that a Participant resigns at a time after engaging in Detrimental Activity, such resignation shall nonetheless be treated as a termination with Cause for all purposes hereunder, (iii) as a condition of the exercise, distribution or settlement of any Award, the Committee may, at its sole discretion, require the Participant to certify at the time of exercise, in a manner acceptable to the Company, that the Participant is in compliance with the terms and conditions of the Plan and that the Participant has not engaged in any Detrimental Activity, and (iv) in the event that the Participant engages in Detrimental Activity during the one-year period commencing on the date of exercise, distribution or settlement of an Award, whether or not such Person continues to be employed by the Company, the Company shall be entitled to recover from such Participant at any time within one year after such exercise, settlement, or distribution, and the Participant shall pay over to the Company, an amount equal to any gain realized as a result of the exercise, distribution or settlement (whether at the time of exercise, distribution or settlement or thereafter). The foregoing provisions described in this Article XI shall terminate upon a Change in Control.

ARTICLE XII

OTHER PROVISIONS

12.1 Indemnification. No member of the Board, including members of the Committee, nor any Person to whom ministerial duties have been delegated, shall be Personally liable for any action, interpretation or determination made with respect to the Plan or Awards made thereunder, and each member of the Board shall be fully indemnified and protected by the Company with respect to any liability he or she may incur with respect to any such action, interpretation or determination, to the extent permitted by applicable law and to the extent provided in the Company’s Articles of Association, as amended from time to time, or under any agreement between any such member and the Company.

12.2 Termination and Amendment.

(a) Amendment and Termination of the Plan. Except as otherwise provided in an Award Agreement, the Board, without approval of the stockholders, may amend, modify or terminate the Plan, except that no amendment shall become effective without prior approval of the stockholders of the Company if stockholder approval would be required by applicable law or regulations, including if required for continued compliance with the performance-based compensation exception of Section 162(m) of the Code or any successor thereto, under the provisions of Section 409A of the Code or any successor thereto, under the provisions of Section 422 of the Code or any successor thereto, or by any listing requirement of the principal stock exchange on which the Ordinary Shares are then listed.

(b) Amendment or Substitution of Grants under the Plan. The terms of any outstanding Award under the Plan may be amended from time to time by the Committee in its discretion in any manner that it deems appropriate including, but not limited to, acceleration of the date of exercise of any Award and/or payments thereunder or of the date of lapse of restrictions on Award Securities (but, in the case of an Award that is or would be treated as “deferred compensation” for purposes of Section 409A of the Code, only to the extent permitted by guidance issued under Section 409A of the Code without resulting in the excise tax thereunder); provided that, except as otherwise provided in Section 12.2 or in an Award

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Agreement, no such amendment shall adversely affect in a material manner any right of a Participant under the Award without his or her written consent, and further provided that the Committee shall not reduce the exercise price of any Options or Stock Appreciation Rights awarded under the Plan without stockholder approval. The Committee may, in its discretion, permit holders of Awards under the Plan to surrender outstanding Awards in order to exercise or realize rights under other Awards, or in exchange for new Awards, or require holders of Awards to surrender outstanding Awards as a condition precedent to the receipt of new Awards under the Plan, but only if such surrender, exercise, realization, exchange or Award (a) is not treated as a payment of, and does not cause a Award to be treated as, deferred compensation for the purposes of Section 409A of the Code or (b) is permitted under guidance issued pursuant to Section 409A of the Code without resulting in the excise tax thereunder.

12.3 Taxes.

(a) The Company shall have the right to require Participants or their beneficiaries or legal representatives to remit to the Company an amount sufficient to satisfy his or her minimum federal, state, local and foreign withholding tax requirements, or to deduct from all payments under the Plan amounts sufficient to satisfy such minimum withholding tax requirements. Whenever payments under the Plan are to be made to a Participant in cash, such payments shall be net of any amounts sufficient to satisfy all federal, state, local and foreign withholding tax requirements.

(b) The Committee may, in its discretion permit a Participant to satisfy his or her tax withholding obligation either by (i) surrendering Award Securities owned by the Participant or (ii) having the Company withhold from Award Securities otherwise deliverable to such Participant. Award Securities surrendered or withheld shall be valued at Fair Market Value as of the date on which income is required to be recognized for income tax purposes. Once a Participant surrenders or has withheld Award Securities hereunder, such action shall be irrevocable. Any deliver of Award Securities under this Section 12.3 shall be subject to the conditions and pursuant to the procedures of Section 4.6(b).

12.4 Withholding. In a situation where, if a Participant were to receive Restricted Securities or other Award Securities through exercise of an Option or other Award, the Company or any of its Affiliates (or a former Affiliate) would be obliged to (or would suffer a disadvantage if it were not to) account for any tax or social security contributions in any jurisdiction for which that Person would be liable by virtue of the receipt of Award Securities or which would be recoverable from that Person (together, the “Tax Liability”), the Restricted Securities may not be issued nor the Options or other Awards exercised unless that Person has either (i) made a payment to the Company or any of its Affiliates (or a former Affiliate) of an amount at least equal to the Company’s estimate of the Tax Liability, or (ii) entered into arrangements acceptable to the Company or any of its Affiliates (or a former Affiliate) to secure that such a payment is made (whether by authorizing the sale of some or all of the Restricted Securities and/or other Award Securities, as applicable, on his or her behalf and the payment to the Company or any of its Affiliates (or a former Affiliate) of the relevant amount out of the proceeds of sale or otherwise).

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12.5 Section 409A of the Code.

(a) The Plan is intended to comply with the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent. To the extent that any Award is subject to Section 409A of the Code, it shall be paid in a manner that will comply with Section 409A of the Code, including proposed, temporary or final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto. Notwithstanding anything herein to the contrary, any provision in the Plan that is inconsistent with Section 409A of the Code shall be deemed to be amended to comply with Section 409A of the Code and to the extent such provision cannot be amended to comply therewith, such provision shall be null and void. The Company shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Board or the Company and, in the event that any amount or benefit under the Plan becomes subject to penalties under Section 409A of the Code, responsibility for payment of such penalties shall rest solely with the affected Participants and not with the Company. In no event shall the Company, the Board, or any of their respective Affiliates be liable to any Participant or any other Person for any cost, expense, tax, liability or other detriment imposed on a Participant or any other Person under Section 409A of the Code related to such Participant’s acceptance of any Award or participation in the transactions contemplated by the Plan. Notwithstanding any contrary provision in the Plan or Award Agreement, any payment(s) of “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) that are otherwise required to be made under the Plan to a “specified employee” (as defined under Section 409A of the Code) as a result of his or her separation from service (other than a payment that is not subject to Section 409A of the Code) shall be delayed for the first six (6) months following such separation from service (or, if earlier, the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award Agreement) on the payment date that immediately follows the end of such six month period or as soon as administratively practicable thereafter.

(b) Except as otherwise provided in an Award Agreement, notwithstanding any of the foregoing provisions of the Plan, and in addition to the powers of amendment set forth in Sections 12.1 and 12.2 hereof, the provisions hereof and the provisions of any Award made hereunder may be amended unilaterally by the Company from time to time to the extent necessary (and only to the extent necessary) to prevent the implementation, application or existence (as the case may be) of any such provision from (i) requiring the inclusion of any compensation deferred pursuant to the provisions of the Plan (or an award thereunder) in a Participant’s gross income pursuant to Section 409A of the Code, and the regulations issued thereunder from time to time and/or (ii) inadvertently causing any award hereunder to be treated as providing for the deferral of compensation pursuant to such Code section and regulations.

12.6 Section 162(m) Transition. The Plan was adopted by the Board and approved by the Company’s stockholders, both of which occurred prior to the Initial Public Offering. The Plan is intended to constitute a plan described in Treasury Regulation Section 1.162-27(f)(1), pursuant to which the deduction limits under Section 162(m) of the Code do not apply during the applicable reliance period. The reliance period shall end on the earliest to occur of the following: (i) the date of the first meeting of stockholders of the Company at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Initial Public Offering occurs; (ii) the date the Plan is materially amended for purposes of

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Treasury Regulation Section 1.162-27(h)(1)(iii); or (iii) the date all Ordinary Shares available for issuance have been allocated.

12.7 Participant Compliance.

(a) In connection with the subscription to or exercise of any Award, and/or the transfer of any Award Security, Participant shall comply with (i) all applicable securities laws, including, to the extent applicable, the Securities Act, the 1934 Act and the Dutch Financial Supervision Act, and the rules and regulations promulgated thereunder and (ii) to the extent applicable to such Participant, the insider trading and disclosure policies or procedures of the Company as in effect from time to time, including, without limitation, policies regarding compliance with Section 16 of the 1934 Act and Section 5:65 of the Dutch Financial Supervision Act.

(b) In connection with the subscription to or exercise of any Award, Participant shall execute such documents necessary for the Company to perfect exemptions from registration under any applicable federal and state securities laws in the United States and elsewhere as the Company may reasonably request.

12.8 Data Protection. By participating in the Plan or accepting any rights granted under it, each Participant consents to the collection and processing of Personal data relating to the Participant so that the Company and its Affiliates can fulfill their obligations and exercise their rights under the Plan and generally administer and manage the Plan. This data will include, but may not be limited to, data about participation in the Plan and securities offered or received, purchased or sold under the Plan from time to time and other appropriate financial and other data (such as the date on which the Options were granted) about the Participant and his participation in the Plan.

12.9 Notices. Notices required or permitted to be made under the Plan shall be in writing and shall be deemed given, delivered and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile prior to 5:00 p.m. (New York time) on a business day, (ii) the business day after the date of transmission, if such notice or communication is delivered via facsimile later than 5:00 p.m. (New York time) on any business day and earlier than 11:59 p.m. (New York time) on the day preceding the next business day, (iii) one (1) business day after when sent, if sent by nationally recognized overnight courier service (charges prepaid), and (iv) actual receipt by the Person to whom such notice is required to be given. All notices shall be addressed (a) to a Participant at such Participant’s address as set forth in the books and records of the Company and its Subsidiaries, or (b) to the Company or the Committee at the principal office of the Company clearly marked “Attention: Compensation Committee”.

12.10 Severability. Whenever possible, each provision of this Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Plan is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Plan shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

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12.11 Prior Agreements. No provision of any employment, severance, incentive award, or other similar agreement entered into by a Participant, on the one hand, and any Subsidiary of the Company, on the other hand, prior to the Effective Date shall modify or have any effect in any manner on any provision of this Plan or any term or condition of any Award Agreement to which such Participant is a party. Without limiting the generality of the foregoing, any provision in any such agreement that purports to apply in any manner to options, security, equity-based awards or the like shall not apply to or have any effect on any Awards under the Plan.

12.12 Governing Law and Forum; Waiver of Jury Trial. The Plan shall be construed and interpreted in accordance with the laws of the State of New York, United States. Each Participant who accepts an Award thereby agrees that any suit, action or proceeding brought by or against such Participant in connection with this Plan shall be brought solely in the state and federal courts sitting in the State of New York, County of New York, United States, and each Participant consents to the jurisdiction and venue of each such court. EACH PARTICIPANT WHO ACCEPTS AN AWARD IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTICIPANT IN RESPECT OF HIS OR HER RIGHTS OR OBLIGATIONS HEREUNDER.

* * * * *

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EXHIBIT A

PERFORMANCE GOALS

To the extent permitted under Section 162(m) of the Code, performance goals established for purposes of Awards intended to be “performance-based compensation” under Section 162(m) of the Code, shall be based on the attainment of certain target levels of, or a specified increase or decrease (as applicable) in one or more of the following performance goals:

• earnings per share;

• operating income;

• gross income;

• net income (before or after taxes);

• cash flow;

• gross profit;

• gross profit return on investment;

• gross margin return on investment;

• gross margin;

• operating margin;

• working capital;

• earnings before interest and taxes;

• earnings before interest, tax, depreciation and amortization;

• return on equity;

• return on assets;

• return on capital;

• return on invested capital;

• net revenues;

• gross revenues;

• revenue growth;

• annual recurring revenues;

• recurring revenues;

• license revenues;

• sales or market share;

• total shareholder return;

• economic value added;

• specified objectives with regard to limiting the level of increase in all or a portion of the Company’s bank debt or other long-term or short-term public or private debt or other similar financial obligations of the Company, which may be calculated net of cash balances and/or other offsets and adjustments as may be established by the Committee in its sole discretion;

• the fair market value of the a share of Common Stock;

• the growth in the value of an investment in the Common Stock assuming the reinvestment of dividends; or

• reduction in operating expenses.

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With respect to Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, to the extent permitted under Section 162(m) of the Code, the Committee may, in its sole discretion, also exclude, or adjust to reflect, the impact of an event or occurrence that the Committee determines should be appropriately excluded or adjusted, including:

(a) restructurings, discontinued operations, extraordinary items or events, and other unusual or non-recurring charges as described in Accounting Principles Board Opinion No. 30 and/or management’s discussion and analysis of financial condition and results of operations appearing or incorporated by reference in the Company’s Form 10-K for the applicable year;

(b) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management; or

(c) a change in tax law or accounting standards required by generally accepted accounting principles.

Performance goals may also be based upon individual Participant performance goals, as determined by the Committee, in its sole discretion. In addition, Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code may be based on the performance goals set forth herein or on such other performance goals as determined by the Committee in its sole discretion.

In addition, such performance goals may be based upon the attainment of specified levels of Company (or subsidiary, division, other operational unit, administrative department or product category of the Company) performance under one or more of the measures described above relative to the performance of other corporations. With respect to Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, to the extent permitted under Section 162(m) of the Code, but only to the extent permitted under Section 162(m) of the Code (including, without limitation, compliance with any requirements for stockholder approval), the Committee may also designate additional business criteria on which the performance goals may be based.

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EX-31.1

Exhibit 31.1

Certification

I, Thomas Wroe, Chief Executive Officer of Sensata Technologies Holding N.V., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sensata Technologies Holding N.V.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 26, 2010

/S/    THOMAS WROE        

Thomas Wroe

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Jeffrey Cote, Chief Financial Officer of Sensata Technologies Holding N.V., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sensata Technologies Holding N.V.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 26, 2010

/S/    JEFFREY COTE        

Jeffrey Cote

Chief Financial Officer

EX-31.3

Exhibit 31.3

Certification

I, Robert Hureau, Chief Accounting Officer of Sensata Technologies Holding N.V., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sensata Technologies Holding N.V.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 26, 2010

/S/    ROBERT HUREAU        

Robert Hureau

Chief Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Sensata Technologies Holding N.V. (the “Company”) for the quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned chief executive officer, chief financial officer and chief accounting officer of the Company, certifies, to the best knowledge and belief of the signatory, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/    THOMAS WROE        

Thomas Wroe

Chief Executive Officer

Date: April 26, 2010

/S/    JEFFREY COTE        

Jeffrey Cote

Chief Financial Officer

Date: April 26, 2010

/S/    ROBERT HUREAU        

Robert Hureau

Chief Accounting Officer

Date: April 26, 2010