Credit Agreements

On October 6, 2006, the Company signed a Credit Agreement (“2006 Credit Agreement”) with Bank of America, N.A., Union Bank of California, N.A., U.S. Bank National Association and other Lenders. The 2006 Credit Agreement provided for a $300 million, five-year revolving line of credit. Under the 2006 Credit Agreement, borrowings bore interest based upon the prime lending rate of the Bank of America or Eurodollar rates with a provision for a spread over Eurodollar rates based upon the Company’s leverage ratio. The Eurodollar interest rate was 1.053 percent and the prime lending rate was 3.25 percent at December 31, 2010. The 2006 Credit Agreement required the Company to pay a commitment fee on the amount of unused credit at a rate, based on the Company’s leverage ratio, which ranges from 0.175 percent to 0.325 percent. At December 31, 2010, the commitment fee rate was 0.175 percent. At December 31, 2010, the Company had no amounts outstanding under the 2006 Credit Agreement. The Company had $6.5 million of letters of credit outstanding under the 2006 Credit Agreement at December 31, 2010, which reduces the total available credit. This credit facility was terminated on February 8, 2011.


Note 9.	Credit Agreements—(Continued)

On July 7, 2010, the Company entered into an uncommitted letter of credit agreement with Bank of America to support letters of credit whose expiration would extend beyond the 2006 Credit Agreement. At December 31, 2011 and 2010, the total value of letters of credit outstanding under this facility was $0.6 million and $8.6 million, respectively.

On February 8, 2011, the Company signed a new Credit Agreement (“Credit Agreement”) with Bank of America, N.A., U.S. Bank National Association, JPMorgan Chase Bank N.A. and other Lenders. The Credit Agreement provides for a $200 million, five-year revolving line of credit. The Company has the right, subject to certain conditions including approval of additional commitments by qualified lenders, to increase the line of credit by an additional $150 million until February 8, 2016. The Credit Agreement allows the Company and certain designated subsidiaries to borrow in euro, kroner, pound sterling and other agreed upon currencies. Borrowing rates under the Credit Agreement are determined at the Company’s option at the time of each borrowing and are generally based on either the prime lending rate of Bank of America, N.A. or the rate of interest paid for deposits in the relevant currency, plus a specified margin based on an established consolidated total leverage ratio grid. The Eurodollar interest rate was 2.081 percent and the prime lending rate was 3.25 percent at December 31, 2011. The Credit Agreement requires the Company to pay a commitment fee on the amount of unused credit at a rate, based on the Company’s leverage ratio, which ranges from 0.25 percent to 0.40 percent. At December 31, 2011, the commitment fee rate was 0.25 percent. The Credit Agreement contains two financial covenants that require the maintenance of certain leverage ratios. The five-year revolving line of credit available under the Credit Agreement is unsecured. At December 31, 2011, the Company had no amounts outstanding under the Credit Agreement and had $15.8 million of letters of credit outstanding, which reduces the total available credit.

The Company, through its Sweden subsidiary, has a 30 million Swedish kroner (approximately $4.3 million) line of credit with an interest rate at 2.81 percent at December 31, 2011. At December 31, 2011, the Company had no amounts outstanding on this line of credit. The 30 million Swedish kroner line of credit is secured primarily by accounts receivable and inventories of the Company’s Swedish subsidiary and is subject to automatic renewal on an annual basis.