10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2009

Commission file number 0-31164

Preformed Line Products Company

(Exact name of registrant as specified in its charter)

Ohio	34-0676895
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
660 Beta Drive
Mayfield Village, Ohio	44143
(Address of Principal Executive Office)	(Zip Code)

(440) 461-5200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Shares, $2 par value per share	NASDAQ

Securities registered pursuant to Section 12(g) of the Act: (None)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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 þ No o

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 (S232.405 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 o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. 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 o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a 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 o No þ

The aggregate market value of voting and non-voting common shares held by non-affiliates of the registrant as of June 30, 2009 was $98,875,883, based on the closing price of such common shares, as reported on the NASDAQ National Market System. As of March 10, 2010 there were 5,253,140 common shares of the Company ($2 par value) outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 26, 2010 are incorporated by reference into Part III, Items 10, 11, 12, 13 and 14.

Table of Contents

	Page
Part I.
Item 1. Business		4
Item 1A. Risk Factors		13
Item 1B. Unresolved Staff Comments		14
Item 2. Properties		15
Item 3. Legal Proceedings		16
Item 4. (Removed and Reserved)		16
Part II.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities		17
Item 6. Selected Financial Data		19
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		35
Item 8. Financial Statements and Supplementary Data		36
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		67
Item 9A. Controls and Procedures		67
Item 9B. Other Information		69
Part III.
Item 10. Directors, Executive Officers and Corporate Governance		69
Item 11. Executive Compensation		69
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		69
Item 13. Certain Relationships, Related Transactions, and Director Independence		70
Item 14. Principal Accounting Fees and Services		70
Part IV.
Item 15. Exhibits and Financial Statement Schedules		70
SIGNATURES		72
Schedule II — Valuation and Qualifying Accounts		73
EX-2.1
EX-21
EX-23.1
EX-23.2
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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Forward-Looking Statements

     This Form 10-K and other documents we file with the Securities and Exchange Commission (“SEC”) contain forward-looking statements regarding Preformed Line Products Company’s (the “Company”) and management’s beliefs and expectations. As a general matter, forward-looking statements are those focused upon future plans, objectives or performance (as opposed to historical items) and include statements of anticipated events or trends and expectations and beliefs relating to matters not historical in nature. Such forward-looking statements are subject to uncertainties and factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond the Company’s control. Such uncertainties and factors could cause the Company’s actual results to differ materially from those matters expressed in or implied by such forward-looking statements.

     The following factors, among others, could affect the Company’s future performance and cause the Company’s actual results to differ materially from those expressed or implied by forward-looking statements made in this report:

• The overall demand for cable anchoring and control hardware for electrical transmission and distribution lines on a worldwide basis, which has a slow growth rate in mature markets such as the United States (U.S.), Canada, and Western Europe;

• The ability of our customers to raise funds needed to build the facilities their customers require;

• Technological developments that affect longer-term trends for communication lines such as wireless communication;

• The decreasing demands for product supporting copper-based infrastructure due to the introduction of products using new technologies or adoption of new industry standards;

• The Company’s success at continuing to develop proprietary technology to meet or exceed new industry performance standards and individual customer expectations;

• The Company’s success in strengthening and retaining relationships with the Company’s customers, growing sales at targeted accounts and expanding geographically;

• The extent to which the Company is successful in expanding the Company’s product line into new areas;

• The Company’s ability to identify, complete and integrate acquisitions for profitable growth;

• The potential impact of consolidation, deregulation and bankruptcy among the Company’s suppliers, competitors and customers;

• The relative degree of competitive and customer price pressure on the Company’s products;

• The cost, availability and quality of raw materials required for the manufacture of products;

• The effects of fluctuation in currency exchange rates upon the Company’s reported results from international operations, together with non-currency risks of investing in and conducting significant operations in foreign countries, including those relating to political, social, economic and regulatory factors;

• Changes in significant government regulations affecting environmental compliances;

• The telecommunication market’s continued deployment of Fiber-to-the-Premises;

• The Company’s ability to obtain funding for future acquisitions;

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• The potential impact of the depressed housing market on the Company’s ongoing profitability and future growth opportunities;

• The continued support by Federal, State, Local and Foreign Governments in incentive programs for promoting renewable energy deployment;

• Those factors described under the heading “Risk Factors” on page 13.

Part I

Item 1. Business

Background

     Preformed Line Products Company and its subsidiaries (the “Company”) is an international designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for the energy, telecommunication, cable operators, information (data communication) and other similar industries. The Company’s primary products support, protect, connect, terminate and secure cables and wires. The Company also provides solar hardware systems and mounting hardware for a variety of solar power applications. The Company’s goal is to continue to achieve profitable growth as a leader in the innovation, development, manufacture and marketing of technically advanced products and services related to energy, communications and cable systems and to take advantage of this leadership position to sell additional quality products in familiar markets.

     The Company serves a worldwide market through strategically located domestic and international manufacturing facilities. Each of the Company’s domestic and international manufacturing facilities have obtained an International Organization of Standardization (“ISO”) 9001:2000 Certified Management System, with the exception of Direct Power and Water Corporation (DPW), which was acquired during 2007. The ISO 9001:2000 certified management system is a globally recognized quality standard for manufacturing and assists the Company in marketing its products throughout the world. The Company’s customers include public and private energy utilities and communication companies, cable operators, financial institutions, governmental agencies, contractors and subcontractors, distributors and value-added resellers. The Company is not dependent on a single customer or a few customers. No single customer accounts for more than ten percent of the Company’s consolidated revenues.

     The Company’s products include:

• Formed Wire and Related Hardware Products

• Protective Closures

• Data Communication Cabinets

• Plastic Products

• Other Products

     Formed Wire Products and Related Hardware Products are used in the energy, communications, cable and special industries to support, protect, terminate and secure both power conductor and communication cables and to control cable dynamics (e.g., vibration). Formed wire products are based on the principle of forming a variety of stiff wire materials into a helical (spiral) shape. Advantages of using the Company’s helical formed wire products are that they are economical, dependable and easy to use. The Company introduced formed wire products to the power industry over 60 years ago and such products enjoy an almost universal acceptance in the Company’s markets. Related hardware products include hardware for supporting and protecting transmission conductors, spacers, spacer-dampers, stockbridge dampers, corona suppression devices and various compression fittings for dead-end applications. Formed wire and related hardware products are approximately 62% of the Company’s revenues in 2009, 59% in 2008 and 60% in 2007.

     Protective Closures, including splice cases, are used to protect fixed line communication networks, such as copper cable or fiber optic cable, from moisture, environmental hazards and other potential contaminants. Protective closures are approximately 22% of the Company’s revenues in 2009, 24% in 2008 and 27% in 2007.

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     Data Communication Cabinets are products used in high-speed data systems to hold and protect electronic equipment. Data communication cabinets are approximately 4% of the Company’s revenues in 2009, 5% in 2008 and 6% in 2007.

     Plastic Products, including guy markers, tree guards, fiber optic cable markers and pedestal markers, are used in energy, communications, cable television and special industries to identify power conductors, communication cables and guy wires. Plastic products are approximately 3% of the Company’s revenues in 2009 and 2008 and 2% in 2007.

     Other Products include hardware assemblies, pole line hardware, resale products, underground connectors, solar hardware systems and urethane products. They are used by energy, renewable energy, communications, cable and special industries for various applications and are defined as products that compliment the Company’s core line offerings. Other products are approximately 9% of the Company’s revenues in 2009 and 2008 and 5% in 2007.

Corporate History

     The Company was incorporated in Ohio in 1947 to manufacture and sell helically shaped “armor rods” which are sets of stiff helically shaped wires applied on an electrical conductor at the point where it is suspended or held. Thomas F. Peterson, the Company’s founder, developed and patented a unique method to manufacture and apply these armor rods to protect electrical conductors on overhead power lines. Over a period of years, Mr. Peterson and the Company developed, tested, patented, manufactured and marketed a variety of helically shaped products for use by the electrical and telephone industries. Although all of Mr. Peterson’s patents have now expired, those patents served as the nucleus for licensing the Company’s formed wire products abroad.

     The success of the Company’s formed wire products in the U.S. led to expansion abroad. The first international license agreement was established in the mid-1950s in Canada. In the late 1950s the Company’s products were being sold through joint ventures and licensees in Canada, England, Germany, Spain and Australia. Additionally, the Company began export operations and promoted products into other selected offshore markets. The Company continued its expansion program, bought out most of the original licensees, and, by the mid-1990s, had complete ownership of operations in Australia, Brazil, Canada, Great Britain, South Africa and Spain and held a minority interest in two joint ventures in Japan. The Company’s international subsidiaries have the necessary infrastructure (i.e. manufacturing, engineering, marketing and general management) to support local business activities. Each is staffed with local personnel to ensure that the Company is well versed in local business practices, cultural constraints, technical requirements and the intricacies of local client relationships.

     In 1968, the Company expanded into the underground telecommunications field by its acquisition of the Smith Company located in California. The Smith Company had a patented line of buried closures and pressurized splice cases. These closures and splice cases protect copper cable openings from environmental damage and degradation. The Company continued to build on expertise acquired through the acquisition of the Smith Company and in 1995 introduced the highly successful COYOTEâ Closure line of products. Since 1995 fourteen domestic and three international patents have been granted to the Company on the COYOTE Closure. None of the COYOTE Closure patents have expired. The earliest COYOTE Closure patent was filed April 1995 and will not expire until April 2015.

     In 1993, the Company purchased the assets of Superior Modular Products Company. Located in Asheville, North Carolina, Superior Modular Products is a technical leader in the development and manufacture of high-speed interconnection devices for voice, data and video applications. This acquisition was the catalyst to expand the Company’s range of communication products to components for structuring cabling systems used inside a customer’s premises.

     Recognizing the need for a stronger presence in the fast growing Asian market, in 1996 the Company formed a joint venture in China and, in 2000, became sole owner of this venture.

     In 2000, the Company acquired Rack Technologies Pty. Ltd, headquartered in Sydney, Australia. Rack Technologies is a specialist manufacturer of rack system enclosures for the communications, electronics and

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securities industries. This acquisition complements and broadens the Company’s existing line of data communication products used inside a customer’s premises.

     In 2002, the Company acquired the remaining 2.6% minority interest in its operations in Mexico. The 97.4% interest was acquired in 1969.

     In 2003, the Company sold its 24% interest in Toshin Denko Kabushiki Kaisha in Osaka, Japan. The Company’s investment in Toshin Denko dated back to 1961 when the joint venture company was founded.

     In 2004, the Company acquired the assets of Union Electric Manufacturing Co. Ltd, located in Bangkok, Thailand.

     In 2004, the Company sold its 49% interest in Japan PLP Co. Ltd., a joint venture in Japan.

     In 2007, the Company acquired the shares of DPW, located in New Mexico, U.S. This acquisition broadens the Company’s product lines and manufactures mounting hardware for a variety of solar power applications and provides designs and installations of solar power systems.

     In 2007, the Company acquired 83.74% of Belos SA (Belos), located in Bielsko-Biala, Poland. Belos is a manufacturer and supplier of fittings for various voltage power networks. This acquisition complements the Company’s existing line of energy products. In 2008, the Company acquired 8.3% additional shares of Belos. In 2009, the Company acquired 4.1% additional shares of Belos.

     In 2008, the Company divested its data communication business Superior Modular Products.

     In 2008, the Company formed a joint venture between the Company’s Australian subsidiary, Preformed Line Products Australia Pty Ltd (PLP-AU) and BlueSky Energy Pty Ltd, a solar systems integration and installation business based in Sydney, Australia. PLP-AU holds a 50% ownership interest in the joint venture company, which operates under the name BlueSky Energy Australia (BlueSky), with the option to acquire the remaining 50% ownership interest from BlueSky Energy Pty Ltd over the next five years.

     In 2009, the Company has acquired a 33.3% investment in Proxisafe Ltd. Proxisafe is a Canadian developmental company formed to design and commercialize new industrial safety equipment located in Calgary, Alberta.

     In 2009, the Company acquired the Dulmison business from Tyco Electronics Group S.A. (Tyco Electronics), which includes both the acquisition of equity of certain Tyco Electronics entities and the acquisition of assets from other Tyco Electronics entities. Dulmison is a leader in the supply and manufacturer of electrical transmission and distribution products. Dulmison designs, manufacturers and markets pole line hardware and vibration control products for the global electrical utility industry. Dulmison is based in Australia with operations in Australia, Thailand, Indonesia, Malaysia, Mexico and the United States. The acquisition will strengthen the Company’s position in the power distribution and transmission hardware market and will expand the Company’s presence in the Asia-Pacific region.

     The Company’s World headquarters is located at 660 Beta Drive, Mayfield Village, Ohio 44143.

Business

     The demand for the Company’s products comes primarily from new, maintenance and repair construction for the energy, telecommunication and data communication industries. The Company’s customers use many of the Company’s products, including formed wire products, to revitalize the aging outside plant infrastructure. Many of the Company’s products are used on a proactive basis by the Company’s customers to reduce and prevent lost revenue. A single malfunctioning line could cause the loss of thousands of dollars per hour for a power or communication customer. A malfunctioning fiber cable could also result in substantial revenue loss. Repair construction by the Company’s customers generally occurs in the case of emergencies or natural disasters, such as

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hurricanes, tornadoes, earthquakes, floods or ice storms. Under these circumstances, the Company provides 24-hour service to provide the repair products to customers as quickly as possible.

     The Company has adapted the formed wire products’ helical technology for use in a wide variety of fiber optic cable applications that have special requirements. The Company’s formed wire products are uniquely qualified for these applications due to the gentle gripping over a greater length of the fiber cable. This is an advantage over traditional pole line hardware clamps that compress the cable to the point of possible fatigue and optical signal deterioration.

     The Company’s protective closures and splice cases are used to protect cable from moisture, environmental hazards and other potential contaminants. The Company’s splice cases are easily re-enterable closures that allow utility maintenance workers access to the cables located inside the closure to repair or add communications services. Over the years, the Company has made many significant improvements in the splice case that have greatly increased their versatility and application in the market place. The Company also designs and markets custom splice cases to satisfy specific customer requirements. This has allowed the Company to remain a strong partner with several primary customers and has earned the Company the reputation as a responsive and reliable supplier.

     Fiber optic cable was first deployed in the outside plant environment in the early 1980s. Through fiber optic technologies, a much greater amount of both voice and data communication can be transmitted reliably. In addition, this technology solved the cable congestion problem that the large count copper cable was causing in underground, buried and aerial applications. The Company developed and adapted copper closures for use in the emerging fiber optic world. In the late 1980s, the Company developed a series of splice cases designed specifically for fiber application. In the mid-1990s, the Company developed its plastic COYOTE Closure, and has since expanded the product line to address Fiber-to-the-Premise (FTTP) applications. The COYOTE Closure is an example of the Company developing a new line of proprietary products to meet the changing needs of its customers.

     The Company also designs and manufactures data communication cabinets and enclosures for data communication networks, offering a comprehensive line of copper and fiber optic cross-connect systems. The product line enables reliable, high-speed transmission of data over customers’ local area networks.

     With the acquisition of DPW in 2007, the Company expanded into the fast growing renewable energy sector. DPW provides a comprehensive line of mounting hardware for a variety of solar power applications including residential roof mounting, commercial roofing systems, top of pole mounting and customized solutions. DPW also provides design and installation services for residential and commercial solar power systems primarily in the western U.S.

Markets

     The Company markets its products to the energy, telecommunication, cable, data communication and special industries. While rapid changes in technology have blurred the distinctions between telephone, cable, and data communication, the energy industry is clearly distinct. The Company’s role in the energy industry is to supply formed wire products and related hardware used with the electrical conductors, cables and wires that transfer power from the generating facility to the ultimate user of that power. Formed wire products are used to support, protect, terminate and secure both power conductor and communication cables and to control cable dynamics.

     Electric Utilities — Transmission. The electric transmission grid is the interconnected network of high voltage aluminum conductors used to transport large blocks of electric power from generating facilities to distribution networks. Currently, there are three major power grids in the U.S.: the Eastern Interconnect, the Western Interconnect and the Texas Interconnect. Virtually all electrical energy utilities are connected with at least one other utility by one of these major grids. The Company believes that the transmission grid has been neglected throughout much of the U.S. for more than a decade. Additionally, because of deregulation, some electric utilities have turned this responsibility over to Independent System Operators (ISOs), who have also been slow to add transmission lines. With demand for power now exceeding supply in some areas, the need for the movement of bulk power from the energy-rich areas to the energy-deficient areas means that new transmission lines will likely be built and many existing lines will likely be refurbished. In addition, passage of the economic stimulus bill in early 2009 that contains provisions for upgrading the aging transmission infrastructure and connecting renewable energy

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sources to the grid should attract new investment to fund new infrastructure projects in the industry. The Company believes that this will generate growth for the Company’s products in this market over at least the next several years. In addition, increased construction of international transmission grids is occurring in many regions of the world. However, consolidations in the markets that the Company services may also have an adverse impact on the Company’s revenues.

     Electric Utilities — Distribution. The distribution market includes those utilities that distribute power from a substation where voltage is reduced to levels appropriate for the consumer. Unlike the transmission market, distribution is still handled primarily by local electric utilities. These utilities are motivated to reduce cost in order to maintain and enhance their profitability. The Company believes that its growth in the distribution market will be achieved primarily as a result of incremental gains in market share driven by emphasizing the Company’s quality products and service over price. Internationally, particularly in the developing regions, there is increasing political pressure to extend the availability of electricity to additional populations. Through its global network of factories and sales offices, the Company is prepared to take advantage of this new growth in construction.

     Renewable Energy. The renewable energy market includes residential consumers, commercial businesses, off-grid operators, and utility companies that have an interest in alternative energy sources. Environmental concerns along with federal, state, and local utility incentives have fueled demand for renewable energy systems including solar, wind, and biofuel. The passage of the economic stimulus bill in 2009, which contains provisions for investment in clean energy technologies, should further drive future demand for alternative energy sources like solar. The industry continues to grow rapidly as advancements in technology lead to greater efficiencies which drive down overall system costs. The Company currently provides hardware solutions, system design and installation services for solar power applications. The Company markets and sells these products and services to end-users, distributors, installers and integrators.

     Communication and Cable. Major developments, including growing competition between the cable and communications industries and increasing overall demand for high-speed communication services, have led to a changing regulatory and competitive environment in many markets throughout the world. The deployment of new access networks and improvements to existing networks for advanced applications continues to gain momentum.

     Cable operators, local communication operators and power utilities are building, rebuilding or upgrading signal delivery networks in developed countries. These networks are designed to deliver video and voice transmissions and provide Internet connectivity to individual residences and businesses. Operators deploy a variety of network technologies and architectures to carry broadband and narrowband signals. These architectures are constructed of electronic hardware connected via coaxial cables, copper wires or optical fibers. The Company manufactures closures that these industries use to securely connect and protect these vital networks.

     As critical components of the outdoor infrastructure, closures provide protection against weather and vandalism, and permit technicians who maintain and manage the system ready access to the devices. Cable operators and local telephone network operators place great reliance on manufacturers of protective closures because any material damage to the signal delivery networks is likely to disrupt communication services. In addition to closures, the Company supplies the communication and cable industry with its formed wire products to hold, support, protect and terminate the copper wires and cables and the fiber optic cables used by that industry to transfer voice, video or data signals.

     The industry has developed technological methods to increase the usage of copper-based plant through high-speed digital subscriber lines (DSLs). The popularity of these services, the regulatory environment and the increasingly fierce competition between communications and cable operators has driven the move toward building out the “last mile” in fiber networks. FTTP technology supports the next wave in broadband innovation by carrying fiber optic technology into homes and businesses. The Company has been actively developing products that address this market.

     Data Communication. The data communication market is being driven by the continual demand for increased bandwidth. Growing Internet Service Providers (ISPs), construction in Wide Area Networks (WANs) and demand for products in the workplace are all key elements to the increased demand for the connecting devices made by the Company. This market will increasingly be focused on the systems that provide the highest speed and

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highest quality signal, such as fiber optic and copper networks. The Company’s products are sold to a number of categories of customers including, (i) ISPs, (ii) large companies and organizations which have their own local area network for data communication, and (iii) distributors of structured cabling systems and components for use in the above markets.

     Special Industries. The Company’s formed wire products are also used in other industries which require a method of securing or terminating cables, including the metal building, tower and antenna industries, the arborist industry, and various applications within the marine systems industry. Products other than formed wire products are also marketed to other industries. For example, the Company’s urethane capabilities allow it to market products to the light rail industry. The Company continues to explore new and innovative uses of its manufacturing capabilities; however, these markets remain a small portion of overall consolidated sales.

International Operations

     The international operations of the Company are essentially the same as its domestic (PLP-USA) business. The Company manufactures similar types of products in its international plants as are sold domestically, sells to similar types of customers and faces similar types of competition (and in some cases the same competitors). Sources of supply of raw materials are not significantly different internationally. See Note K in the Notes To Consolidated Financial Statements for information and financial data relating to the Company’s international operations that represent reportable segments.

     While a number of the Company’s international plants are in developed countries, the Company believes it has strong market opportunities in developing countries where the need for the transmission and distribution of electrical power is significant. The Company is now serving the Far East market, other than China and Japan, primarily from Thailand and Indonesia. In addition, as the need arises, the Company is prepared to establish new manufacturing facilities abroad.

Sales and Marketing

     Domestically and internationally, the Company markets its products through a direct sales force and manufacturing representatives. The direct sales force is employed by the Company and works with the manufacturer’s representatives, as well as key direct accounts and distributors who also buy and resell the Company’s products. The manufacturer’s representatives are independent organizations that represent the Company as well as other complimentary product lines. These organizations are paid a commission based on the sales amount.

Research and Development

     The Company is committed to providing technical leadership through scientific research and product development in order to continue to expand the Company’s position as a supplier to the communications and power industries. Research is conducted on a continuous basis using internal experience in conjunction with outside professional expertise to develop state-of-the-art materials for several of the Company’s products. These products capitalize on cost-efficiency while offering exacting mechanical performance that meets or exceeds industry standards. The Company’s research and development activities have resulted in numerous patents being issued to the Company (see “Patents and Trademarks” below).

     Early in its history, the Company recognized the need to understand the performance of its products and the needs of its customers. To that end, the Company developed its own Research and Engineering Center in Mayfield Village, Ohio. Using the Research and Engineering Center, engineers and technicians simulate a wide range of external conditions encountered by the Company’s products to ensure quality, durability and performance. The work performed in the Research and Engineering Center includes advanced studies and experimentation with various forms of vibration. This work has contributed significantly to the collective knowledge base of the industries the Company serves and is the subject matter of many papers and seminars presented to these industries.

     The Company’s 29,000 square feet Research and Engineering Center is located at its corporate headquarters in Mayfield Village, Ohio. The Company believes that this facility is one of the most sophisticated in

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the world in its specialized field. The expanded Research and Engineering Center also has an advanced prototyping technology machine on-site to develop models of new designs where intricate part details are studied prior to the construction of expensive production tooling. Today, the Company’s reputation for vibration testing, tensile testing, fiber optic cable testing, environmental testing, field vibration monitoring and third-party contract testing is a competitive advantage. In addition to testing, the work done at the Company’s Research and Development Center continues to fuel product development efforts. For example, the Company estimates that approximately 22% of 2009 revenues were attributed to products developed by the Company in the past five years. In addition, the Company’s position in the industry is further reinforced by its long-standing leadership role in many key international technical organizations which are charged with the responsibility of establishing industry wide specifications and performance criteria, including IEEE (Institute of Electrical and Electronics Engineers), CIGRE (Counsiel Internationale des Grands Reseaux Electriques a Haute Tension), and IEC (International Electromechanical Commission). Research and development costs are expensed as incurred. Research and development costs for new products were $2.3 million in 2009, $2 million in 2008 and $1.7 million in 2007.

Patents and Trademarks

     The Company applies for patents in the U.S. and other countries, as appropriate, to protect its significant patentable developments. As of December 31, 2009, the Company had in force 35 U.S. patents and 63 international patents in 10 countries and had pending five U.S. patent applications and 22 international applications. While such domestic and international patents expire from time to time, the Company continues to apply for and obtain patent protection on a regular basis. Patents held by the Company in the aggregate are of material importance in the operation of the Company’s business. The Company, however, does not believe that any single patent, or group of related patents, is essential to the Company’s business as a whole or to any of its businesses. Additionally, the Company owns and uses a substantial body of proprietary information and numerous trademarks. The Company relies on nondisclosure agreements to protect trade secrets and other proprietary data and technology. As of December 31, 2009, the Company had obtained U.S. registration on 27 trademarks and no trademark applications remained pending. International registrations amounted to 205 registrations in 38 countries, with 5 pending international registrations.

     Since June 8, 1995, U.S. patents have been issued for terms of 20 years beginning with the date of filing of the patent application. Prior to that time, a U.S. patent had a term of 17 years from the date of its issuance. Patents issued by international countries generally expire 20 years after filing. U.S. and international patents are not renewable after expiration of their initial term. U.S. and international trademarks are generally perpetual, renewable in 10-year increments upon a showing of continued use. To the knowledge of management, the Company has not been subject to any significant allegation or charges of infringement of intellectual property rights by any organization.

     In the normal course of business, the Company occasionally makes and receives inquiries with regard to possible patent and trademark infringement. The extent of such inquiries from third parties has been limited generally to verbal remarks to Company representatives. The Company believes that it is unlikely that the outcome of these inquiries will have a material adverse effect on the Company’s financial position.

Competition

     All of the markets that the Company serves are highly competitive. In each market, the principal methods of competition are price, performance, and service. The Company believes, however, that several factors (described below) provide the Company with a competitive advantage.

• The Company has a strong and stable workforce. This consistent and continuous knowledge base has afforded the Company the ability to provide superior service to the Company’s customers and representatives.

• The Company’s Research and Engineering Center in Mayfield Village, Ohio and Research and Engineering department’s subsidiary locations maintain a strong technical support function to develop unique solutions to customer problems.

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• The Company is vertically integrated both in manufacturing and distribution and is continually upgrading equipment and processes.

• The Company is sensitive to the marketplace and provides an extra measure of service in cases of emergency, storm damage and other rush situations. This high level of customer service and customer responsiveness is a hallmark of the Company.

• The Company’s 16 manufacturing locations ensure close support and proximity to customers worldwide.

     Domestically, there are several competitors for formed wire products. Although it has other competitors in many of the countries where it has plants, the Company has leveraged its expertise and is very strong in the global market. The Company believes that it is the world’s largest manufacturer of formed wire products for energy and communications markets. However, the Company’s formed wire products compete against other pole line hardware products manufactured by other companies.

     Minnesota Manufacturing and Mining Company (“3M”) is the primary domestic competitor of the Company for pressurized copper closures. Based on its experience in the industry, the Company believes it maintains a strong market share position.

     The fiber optic closure market is one of the most competitive product areas for the Company, with the Company competing against, among others, Tyco International Ltd., 3M and Corning Cable Systems. There are a number of primary competitors and several smaller niche competitors that compete at all levels in the marketplace. The Company believes that it is one of four leading suppliers of fiber optic closures.

     The Company’s data communication competitors range from assemblers of low cost, low quality components, to well-established multinational corporations. The Company’s competitive strength is its technological leadership and manufacturing expertise.

Sources and Availability of Raw Materials

     The principal raw materials used by the Company are galvanized wire, stainless steel, aluminum covered steel wire, aluminum re-draw rod, plastic resins, glass-filled plastic compounds, neoprene rubbers and aluminum castings. The Company also uses certain other materials such as fasteners, packaging materials and communications cable. The Company believes that it has adequate sources of supply for the raw materials used in its manufacturing processes and it regularly attempts to develop and maintain sources of supply in order to extend availability and encourage competitive pricing of these products.

     Most plastic resins are purchased under contracts to stabilize costs and improve delivery performance and are available from a number of reliable suppliers. Wire and re-draw rod are purchased in standard stock diameters and coils under contracts from a number of reliable suppliers. Contracts have firm prices except for fluctuations of base metals and petroleum prices, which result in surcharges when global demand is greater than the available supply.

     The Company also relies on certain other manufacturers to supply products that complement the Company’s product lines, such as aluminum and ferrous castings, fiber optic cable and connectors, circuit boards and various metal racks and cabinets. The Company believes there are multiple sources of supply for these products.

     The Company relies on sole source manufacturers for certain raw materials used in production. The current state of economic uncertainty presents a risk that existing suppliers could go out of business. However, there are multiple sources for these materials available, and the Company could relocate the tooling and processes to other manufacturers if necessary.

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     Due to flat or decreasing worldwide demand the costs of raw materials were stable throughout 2009. Manufacturing capacity has reduced for many raw materials and the Company was experiencing price pressure on most key raw materials by the end of 2009 and continuing into 2010.

Backlog Orders

     The Company’s backlog was approximately $38 million at the end of 2009. The Company’s order backlog generally represents six to eight weeks of sales. All customer orders entered are firm at the time of entry. Substantially all orders are shipped within a two to four week period unless the customer requests an alternative date.

Seasonality

     The Company markets products that are used by utility maintenance and construction crews worldwide. The products are marketed through distributors and directly to end users, who maintain stock to ensure adequate supply for their customers or construction crews. As a result, the Company does not have a wide variation in sales from quarter to quarter.

Environmental

     The Company is subject to extensive and changing federal, state, and local environmental laws, including laws and regulations that (i) relate to air and water quality, (ii) impose limitations on the discharge of pollutants into the environment, (iii) establish standards for the treatment, storage and disposal of toxic and hazardous waste, and (iv) require proper storage, handling, packaging, labeling, and transporting of products and components classified as hazardous materials. Stringent fines and penalties may be imposed for noncompliance with these environmental laws. In addition, environmental laws could impose liability for costs associated with investigating and remediating contamination at the Company’s facilities or at third-party facilities at which the Company has arranged for the disposal treatment of hazardous materials.

     Although no assurances can be given, the Company believes it is in compliance in all material respects, with all applicable environmental laws and the Company is not aware of any noncompliance or obligation to investigate or remediate contamination that could reasonably be expected to result in a material liability. The Company does not expect to make any material capital expenditure during 2010 for environmental control facilities. The environmental laws continue to be amended and revised to impose stricter obligations, and compliance with future additional environmental requirements could necessitate capital outlays. However, the Company does not believe that these expenditures should ultimately result in a material adverse effect on its financial position or results of operations. The Company cannot predict the precise effect such future requirements, if enacted, would have on the Company. The Company believes that such regulations would be enacted over time and would affect the industry as a whole.

Employees

     At December 31, 2009, the Company had 2,304 employees. Approximately 30% of the Company’s employees are located in the U.S.

Available Information

     The Company maintains an Internet site at http://www.preformed.com, on which the Company makes available, free of charge, the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC. The Company’s SEC reports can be accessed through the investor relations section of its Internet site. The information found on the Company’s Internet site is not part of this or any other report that is filed or furnished to the SEC.

     The public may read and copy any materials the Company files with or furnishes to the SEC at the SEC’s Public Reference Room at 100 F. Street, NE., Washington, DC 20549. Information on the operation of the Public

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Reference Room is available by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information filed with the SEC by electronic filers. The SEC’s Internet site is http://www.sec.gov. The Company also has a link from its Internet site to the SEC’s Internet site, this link can be found on the investor relations page of the Company’s Internet site.

Item 1A. Risk Factors

Due to the Company’s dependency on the energy and telecommunication industries, the Company is susceptible to negative trends relating to those industries that could adversely affect the Company’s operating results.

     The Company’s sales to the energy and telecommunication industries represent a substantial portion of the Company’s historical sales. The concentration of revenue in such industries is expected to continue into the foreseeable future. Demand for products to these industries depends primarily on capital spending by customers for constructing, rebuilding, maintaining or upgrading their systems. The amount of capital spending and, therefore, the Company’s sales and profitability are affected by a variety of factors, including general economic conditions, access by customers to financing, government regulation, demand for energy and cable services, and technological factors. As a result, some customers may not continue as going concerns, which could have a material adverse effect on the Company’s business, operating results and financial condition. Consolidation and deregulation present the additional risk to the Company in that combined or deregulated customers will rely on relationships with a source other than the Company. Consolidation and deregulation may also increase the pressure on suppliers, such as the Company, to sell product at lower prices.

The Company’s business will suffer if the Company fails to develop and successfully introduce new and enhanced products that meet the changing needs of the Company’s customers.

     The Company’s ability to anticipate changes in technology and industry standards and to successfully develop and introduce new products on a timely basis will be a significant factor in the Company’s ability to grow and remain competitive. New product development often requires long-term forecasting of market trends, development and implementation of new designs and processes and a substantial capital commitment. The trend toward consolidation of the energy, telecommunication and data communication industries may require the Company to quickly adapt to rapidly changing market conditions and customer requirements. Any failure by the Company to anticipate or respond in a cost-effective and timely manner to technological developments or changes in industry standards or customer requirements, or any significant delays in product development or introduction or any failure of new products to be widely accepted by the Company’s customers, could have a material adverse effect on the Company’s business, operating results and financial condition as a result of reduced net sales.

The intense competition in the Company’s markets, particularly telecommunication, may lead to a reduction in sales and profits.

     The markets in which the Company operates are highly competitive. The level of intensity of competition may increase in the foreseeable future due to anticipated growth in the telecommunication and data communication industries. The Company’s competitors in the telecommunication and data communication markets are larger companies with significant influence over the distribution network. There can be no assurance that the Company will be able to compete successfully against its competitors, many of which may have access to greater financial resources than the Company. In addition, the pace of technological development in the telecommunication and data communication markets is rapid and the Company cannot assure that these advances (i.e., wireless, fiber optic network infrastructure, etc.) will not adversely affect the Company’s ability to compete in this market.

The introduction of products embodying new technologies or the emergence of new industry standards can render existing products or products under development obsolete or unmarketable.

     The energy, telecommunication and data communication industries are characterized by rapid technological change. Satellite, wireless and other communication technologies currently being deployed may represent a threat to copper, coaxial and fiber optic-based systems by reducing the need for wire-line networks. There can be no assurance that future advances or further development of these or other new technologies will not have a material adverse effect on the Company’s business, operating results and financial condition as a result of lost sales.

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Price increases of raw materials could result in lower earnings.

     The Company’s cost of sales may be materially adversely affected by increases in the market prices of the raw materials used in the Company’s manufacturing processes. There can be no assurance that price increases in raw materials can be passed onto the Company’s customers through increases in product prices. As a result, the Company’s operating results could be adversely affected.

The Company’s international operations subject the Company to additional business risks.

     International sales account for a substantial portion of the Company’s net sales (54%, 54% and 53% in 2009, 2008 and 2007, respectively) and the Company expects these sales will increase as a percentage of net sales in the future. Due to its international sales, the Company is subject to the risks of conducting business internationally, including unexpected changes in, or impositions of, legislative or regulatory requirements, fluctuations in the U.S. dollar which could materially adversely affect U.S. dollar revenues or operating expenses, tariffs and other barriers and restrictions, potentially longer payment cycles, greater difficulty in accounts receivable collection, reduced or limited protection of intellectual property rights, potentially adverse taxes and the burdens of complying with a variety of international laws and communications standards. The Company is also subject to general geopolitical risks, such as political and economic instability and changes in diplomatic and trade relationships, in connection with its international operations. There can be no assurance that these risks of conducting business internationally will not have a material adverse effect on the Company’s business, operating results and financial condition.

The Company may not be able to successfully integrate businesses that it may acquire in the future.

     A portion of the Company’s growth in sales and earnings has been generated from acquisitions. The Company expects to continue a strategy of identifying and acquiring businesses with complementary products. In connection with this strategy, the Company faces certain risks and uncertainties relating to acquisitions. The factors affecting this exposure are in addition to the risks faced in the Company’s day-to-day operations. Acquisitions involve a number of special risks, including the risks pertaining to integrating acquired businesses. In addition, the Company may incur debt to finance future acquisitions, and the Company may issue securities in connection with future acquisitions that may dilute the holdings of current and future shareholders. Covenant restrictions relating to additional indebtedness could restrict the Company’s ability to pay dividends, fund capital expenditures, consummate additional acquisitions and significantly increase the Company’s interest expense. Any failure to successfully complete acquisitions or to successfully integrate such strategic acquisitions could have a material adverse effect on the Company’s business, operating results and financial condition.

The Company may have interruptions in its businesses due to the uncertainty of the global economy, specifically the potential impact of bankruptcy among the Company’s suppliers and inability of available funding for the Company’s customers.

     The Company relies on sole source manufacturers for certain materials that complement the Company’s product lines. The current state of economic uncertainty presents a risk that existing suppliers could go out of business. While there are multiple sources for these materials available and the Company could relocate the tooling and processes to other manufacturers if needed, there could be an adverse effect on the supply and the Company’s ability to make products on a timely basis if multiple key suppliers fail during this time of uncertainty. Additionally, as the financial markets are experiencing unprecedented volatility, lower levels of liquidity may be available. Although the Company is not dependent on a single customer or a few customers, the inability to obtain funding may postpone customer spending and adversely affect the Company’s business, operating results and financial condition.

Item 1B. Unresolved Staff Comments

     The Company does not have any unresolved staff comments.

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Item 2. Properties

     The Company currently owns or leases 19 facilities, which together contain approximately 2 million square feet of manufacturing, warehouse, research and development, sales and office space worldwide. Most of the Company’s international facilities contain space for offices, research and engineering (R&E), warehousing and manufacturing with manufacturing using a majority of the space. The following table provides information regarding the Company’s principal facilities:

					Reportable
Location	Use	Owned/Leased	Square Feet		Segment
1. Mayfield Village, Ohio	Corporate Headquarters R&E	Owned		62,000	PLP-USA
2. Rogers, Arkansas	Manufacturing Warehouse Office	Owned		310,000	PLP-USA
3. Albemarle, North Carolina	Manufacturing Warehouse Office	Owned		261,000	PLP-USA
4. Sydney, Australia	Manufacturing R&E Warehouse Office	Owned		123,000	Australia
5. São Paulo, Brazil	Manufacturing R&E Warehouse Office	Owned		148,500	Brazil
6. Cambridge, Ontario, Canada	Manufacturing Warehouse Office	Owned		73,300	Canada
7. Andover, Hampshire, England	Manufacturing R&E Warehouse Office	Building Owned; Land Leased		89,400	All Other
8. Queretaro, Mexico	Manufacturing Warehouse Office	Owned		52,900	All Other
9. Beijing, China	Manufacturing Warehouse Office	Building Owned; Land Leased		180,900	All Other
10. Pietermaritzburg, South Africa	Manufacturing R&E Warehouse Office	Owned		73,100	South Africa

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					Reportable
Location	Use	Owned/Leased	Square Feet		Segment
11. Sevilla, Spain	Manufacturing R&E Warehouse Office	Owned		63,300	All Other
12. Bangkok, Thailand	Manufacturing Warehouse Office	Owned		60,000	All Other
13. Albuquerque, New Mexico	Manufacturing Warehouse Office	Leased		27,200	All Other
14. Bielsko-Biala, Poland	Manufacturing Warehouse Office	Buildings Owned; Land Leased		174,400	Poland
15. Bekasi, Indonesia	Manufacturing Office	Owned		135,700	All Other
16. Selangor, Malaysia	Manufacturing Warehouse Office	Leased		14,100	All Other
17. Bangkok, Thailand	Manufacturing Warehouse Office	Leased		135,700	All Other

Item 3. Legal Proceedings

     From time to time, the Company may be subject to litigation incidental to its business. The Company is not a party to any pending legal proceedings that the Company believes would, individually or in the aggregate, have a material adverse effect on its financial condition, results of operations or cash flows.

Item 4. (Removed and Reserved)

Executive Officers of the Registrant

     Each executive officer is elected by the Board of Directors, serves at its pleasure and holds office until a successor is appointed, or until the earliest of death, resignation or removal.

Name	Age		Position
Robert G. Ruhlman		53	Chairman, President and Chief Executive Officer
Eric R. Graef		57	Chief Financial Officer and Vice President — Finance
William H. Haag		46	Vice President — International Operations
J. Cecil Curlee Jr.		53	Vice President — Human Resources
Dennis F. McKenna		43	Vice President — Marketing and Business Development
David C. Sunkle		51	Vice President — Research and Engineering and Manufacturing
Caroline S. Vaccariello		43	General Counsel and Corporate Secretary

     The following sets forth the name and recent business experience for each person who is an executive officer of the Company at March 1, 2010.

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     Robert G. Ruhlman was elected Chairman in July 2004. Mr. Ruhlman has served as Chief Executive Officer since July 2000 and as President since 1995 (positions he continues to hold). Mr. Ruhlman is the brother of Randall M. Ruhlman and son of Barbara P. Ruhlman, both Directors of the Company.

     Eric R. Graef was elected Vice President—Finance in December 1999 and Chief Financial Officer in December, 2007.

     William H. Haag was elected Vice President—International Operations in April 1999.

     J. Cecil Curlee Jr. was hired in 1982 in the position of Personnel Manager at the Albemarle, North Carolina facility. He was promoted to Director of Employee Relations in September 2002 and was elected Vice President—Human Resources in January 2003.

     Dennis F. McKenna was elected Vice President—Marketing and Business Development in April 2004. Mr. McKenna joined the Company in 1993 as a sales engineer and has served in various international and domestic product management, operations, and general management roles within the Company.

     David C. Sunkle was elected Vice President-Research and Engineering in January 2007. In addition, Mr. Sunkle has taken on the role of the Vice President – Manufacturing since July 2008. Mr. Sunkle joined the Company in 1978. He has served a variety of positions in Research and Engineering until 2002 when he became Director of International Operations. In 2006, Mr. Sunkle rejoined Research and Engineering as the Director of Engineering.

     Caroline S. Vaccariello was elected General Counsel and Corporate Secretary in January 2007. Ms. Vaccariello joined the Company in 2005 as General Counsel and has led the Company’s legal affairs since that time. Prior to that time, Ms. Vaccariello worked as an attorney for The Timken Company from 2003 to 2005.

Part II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

     The Company’s Common Shares are traded on NASDAQ under the trading symbol “PLPC”. As of March 10, 2010, the Company had approximately 1,300 shareholders of record. The following table sets forth for the periods indicated (i) the high and low closing sale prices per share of the Company’s Common Shares as reported by the NASDAQ and (ii) the amount per share of cash dividends paid by the Company.

     While the Company expects to continue to pay dividends of a comparable amount in the near term, the declaration and payment of future dividends will be made at the discretion of the Company’s Board of Directors in light of then current needs of the Company. Therefore, there can be no assurance that the Company will continue to make such dividend payments in the future.

	Year ended December 31
	2009						2008
Quarter	High		Low		Dividend		High		Low		Dividend
First	$	47.65	$	28.26	$	0.20	$	59.96	$	42.95	$	0.20
Second		48.96		32.70		0.20		53.88		40.31		0.20
Third		44.16		33.06		0.20		65.50		37.66		0.20
Fourth		44.40		37.85		0.20		56.97		31.82		0.20

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Equity Compensation Plan Information

					Number of securities
	Number of securities				remaining available for
	to be issued upon				future issuance under
	exercise of		Weighted-average		equity compensation
	outstanding options,		exercise price of		plans (excluding
	warrants and rights		outstanding options,		securities reflected in
Plan Category	(a)		warrants and rights		column (a)
Equity compensation plans approved by security holders		138,821	$	38.32		261,179
Equity compensation plans not approved by security holders		85,502	$	33.29		500
Total		224,323				261,679

Performance Graph

     Set forth below is a line graph comparing the cumulative total return of a hypothetical investment in the Company’s Common Shares with the cumulative total return of hypothetical investments in the NASDAQ Market Index and the Hemscott Industry Group 627 (Industrial Electrical Equipment) Index based on the respective market price of each investment at December 31, 2004, December 31, 2005, December 31, 2006, December 31, 2007, December 31, 2008, and December 31, 2009, assuming in each case an initial investment of $100 on January 1, 2004, and reinvestment of dividends.

COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG PREFORMED LINE
PRODUCTS COMPANY, NASDAQ MARKET INDEX AND HEMSCOTT GROUP INDEX

ASSUMES $100 INVESTED ON JAN. 01, 2004
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2009

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COMPANY / INDEX / MARKET	2004		2005		2006		2007		2008		2009
PREFORMED LINE PRODUCTS CO		100.00		150.71		126.96		219.67		171.50		166.35
NASDAQ MARKET INDEX		100.00		102.20		112.68		124.57		74.71		108.56
HEMSCOTT GROUP INDEX		100.00		120.35		161.08		222.59		115.64		156.21

Purchases of Equity Securities

     On February 15, 2007, the Board of Directors authorized a plan to repurchase up to 200,000 shares of Preformed Line Products Company Common Shares. The repurchase plan does not have an expiration date. There were no repurchases for the three-month period ended December 31, 2009.

					Total Number of
	Total				Shares Purchased as		Maximum Number of
	Number of		Average		Part of Publicly		Shares that may yet be
	Shares		Price Paid		Announced Plans or		Purchased under the
Period (2009)	Purchased		per Share		Programs		Plans or Programs
October		—		—		188,748		11,252
November		—		—		188,748		11,252
December		—		—		188,748		11,252
Total		—

Item 6. Selected Financial Data

	2009			2008		2007		2006		2005
	(Thousands of dollars, except per share data)
Net Sales and Income
Net sales	$	257,206		$	269,742	$	233,289	$	196,910	$	186,232
Operating income		19,460			23,988		21,133		16,359		16,673
Income before income taxes and discontinued operations		29,593			24,760		21,321		17,180		17,288
Income from continuing operations, net of tax		22,833			17,042		13,820		11,827		11,170
Net income		22,833			17,911		14,213		12,103		12,030
Net income (loss) attributable to noncontrolling interest, net of tax		(524	)		288		54		—		—
Net income attributable to PLPC		23,357			17,623		14,159		12,103		12,030
Per Share Amounts
Income from continuing operations attributable to PLP shareholders — basic	$	4.46		$	3.17	$	2.57	$	2.11	$	1.95
Net income attributable to PLPC common shareholders — basic		4.46			3.34		2.64		2.16		2.10
Income from continuing operations attributable to PLPC shareholders — diluted		4.35			3.14		2.54		2.09		1.93
Net income attributable to PLPC common shareholders — diluted		4.35			3.30		2.61		2.14		2.08
Dividends declared		0.80			0.80		0.80		0.80		0.80
PLPC Shareholders’ equity		31.50			26.09		27.82		24.47		23.32
Other Financial Information
Current assets	$	138,959		$	112,670	$	123,450	$	100,374	$	110,304
Total assets		235,372			190,875		203,866		170,852		168,458
Current liabilities		46,340			35,248		42,349		32,372		33,900
Long-term debt (including current portion)		7,610			3,147		4,959		4,361		4,928
Capital leases		239			112		373		478		305
PLPC Shareholders’ equity		170,966			136,265		149,721		131,148		133,715

     On December 18, 2009, the Company completed a business combination acquiring certain subsidiaries and other assets from Tyco Electronics. The 2009 results were impacted by a $9.1 million gain, after taxes, on the acquisition, or $1.74 per basic share and $1.69 per diluted share. On May 30, 2008, the Company divested its Superior Modular Products subsidiary (SMP). The net sales and income and per share amounts sections for the years noted above have been restated to provide comparable information excluding the divestiture of the SMP operations.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

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     The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and related Notes To Consolidated Financial Statements included in Item 8 in this report.

     Preformed Line Products Company (the “Company”, “PLPC”, “we”, “us”, or “our”) was incorporated in Ohio in 1947. We are an international designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for the energy, telecommunication, cable operators, information (data communication), and other similar industries. Our primary products support, protect, connect, terminate, and secure cables and wires. We also provide solar hardware systems and mounting hardware for a variety of solar power applications. Our goal is to continue to achieve profitable growth as a leader in the innovation, development, manufacture, and marketing of technically advanced products and services related to energy, communications, and cable systems and to take advantage of this leadership position to sell additional quality products in familiar markets.

     The reportable segments are PLP-USA, Australia, Brazil, South Africa, Canada, Poland, and All Other. Our PLP-USA segment is comprised of our U.S. operations primarily supporting our domestic energy and telecommunications products. The Australia segment is comprised of all of our operations in Australia supporting energy, telecommunications, data communications and solar products. Our Canada and Brazil segments are comprised of the manufacturing and sales operations from those locations which meet at least one of the criteria of a reportable segment. Our final two segments are Poland and South Africa, which are comprised of a manufacturing and sales operation, and have been included as segments to comply with reporting segments for 75% of consolidated sales. Our remaining operations are included in the All Other segment as none of these operations meet, or the future estimated results are not expected to meet, the criteria for a reportable segment.

RECENT DEVELOPMENT

     On December 18, 2009, PLPC and Tyco Electronics Group S.A. (Tyco Electronics) completed a Stock and Asset Purchase Agreement, pursuant to which, PLPC acquired from Tyco Electronics its Dulmison business for $16 million and the assumption of certain liabilities, subject to a customary post-closing working capital adjustment.

     We accounted for the acquisition of Dulmison in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) 805, which includes provisions that were effective January 1, 2009. The new provisions significantly changed the accounting for business combinations both during the period of the acquisition and in subsequent periods. In accordance with ASC 805, transaction costs of $3.9 million associated with the business combination were expensed and a gain of $9.1 million on the acquisition of the business was recorded.

     The acquisition of Dulmison strengthens our position in the power distribution and transmission hardware market and will expand our presence in the Asia-Pacific region. As a result of the acquisition, we added operations in Indonesia and Malaysia and strengthened our existing positions in Australia, Thailand, Mexico, and the United States.

DISCONTINUED OPERATIONS

     Our consolidated financial statements were impacted by the divestiture of Superior Modular Products (SMP) on May 30, 2008. We sold our SMP subsidiary for $11.7 million, for a $.8 million gain, net of tax, and a $1.5 million to be held in escrow for one year. During the year ended December 31, 2009, we received the remaining balance of $.8 million held in escrow. We have not provided any significant continuing involvement in the operations of SMP after the closing of the sale. For tax purposes, the sale of SMP generated a capital loss, which was not deductible except for amounts used to offset capital gains in 2008. A full valuation allowance was provided against the deferred tax asset on the remaining portion of the capital loss carryover.

     The operating results of SMP are presented in our statements of consolidated income as discontinued operations, net of tax. For the year ended December 31, 2008, income from discontinued operation, net of tax was $.9 million, or $.16 per diluted share.

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MARKET OVERVIEW

     Our business continues to be concentrated in the energy and communications markets. During the past couple of years, industry consolidation continued as distributors and service provider consolidations took place in our major markets. This trend is expected to continue in 2010. We have a growing concern that the continued global economic situation coupled with an already depressed U.S. housing market, could further affect construction projects and negatively impact growth opportunities in our core markets in the U.S. and countries such as Spain, Poland and Great Britain where the financial situation is expected to be similar going forward.

     In 2009, we again experienced growth in our energy markets. We continued to see the investment in new transmission grids, new technologies, and upgrading and maintenance of the existing energy infrastructure. We expect the distribution energy market to be flat in 2010 but anticipate continued growth in demand for transmission and fiber optic products.

     The acquisition of Dulmison from Tyco Electronics in late 2009 will further cement PLP’s leadership position and will enable PLP to enhance the scope of its product lines and the technology it provides to this important market. Dulmison’s spacer, spacer-damper and stockbridge damper product lines fit well and complement PLP’s product offerings and enable PLP to offer the most comprehensive line of products in the industry. With demand for electrical power continuing to increase, especially in many fast growing areas of the world, PLP’s leadership position in the market will enable it to take advantage of prospects for continued growth as the transmission grid is enhanced and extended.

     Our international business is more concentrated in the energy markets. Historically, our international sales were primarily related to the distribution portion of the energy market. We believe that we are well positioned to supply the needs of the world’s diverse energy market requirements as a result of our strategically located operations and array of product designs and technologies.

     The year 2009 was challenging for PLP’s communication business throughout the world. Many communications customers cut back on capital and operational spending as the global economic downturn negatively impacted consumer spending on communication services. The U.S. was hit especially hard as communication carriers diverted operational funds to wireless communication projects where they could realize a faster return on their spending and investments. Also, the broadband stimulus program that was announced early in 2009 failed to gain traction throughout the year and the administrative burden of the program has further delayed the deployment of funds. Through all of this, PLP maintained its focus on the customer and put resources towards new product development efforts. These efforts were directed at customer premise and demarcation applications which are the final connections between the network and the end consumer.

     As economic conditions improve and stimulus funds eventually start flowing into projects, PLP’s efforts in these areas will lead to growth in the communications business. Opportunities for growth also look promising in Central and South America where deployment of fixed line telecommunications services and broadband penetration rates remain low as a percentage of the total population.

Preface

     Our consolidated financial results for the year ended December 31, 2009, 2008, and 2007 include the financial results of our solar energy operation, Direct Power and Water (DPW), acquired on March 22, 2007, Belos, in Poland, acquired on September 6, 2007 and BlueSky Energy Pty Ltd. (BlueSky) entered into a joint venture on May 21, 2008. In addition to the $9.1 million gain on the acquisition of Dulmison and $3.9 million of transaction costs, our consolidated financial statements include assets of $30.6 million and $5.5 million in liabilities from the acquisition of Dulmison. From the acquisition date through December 31, 2009, operation results were di minimus.

     Our net sales for the year ended December 31, 2009 decreased $12.5 million, or 5%, and gross profit decreased $2.5 million, or 3%, compared to 2008. Excluding the effect of currency translation, net sales remained unchanged. During 2009, certain of the end markets that we serve continued to see further sales declines. Gross profit decreased primarily due to the decrease in net sales. Excluding the effect of currency translation, gross profit increased 2% compared to 2008. Excluding the effect of currency translation, costs and expenses increased $4.6

21

million, or 7%, as foreign costs and expenses increased $4.1 million and U.S. costs and expenses increased $.5 million. Due to the acquisition of Dulmison, the Company incurred $1.9 million related to due diligence and acquisition related costs and also incurred $2 million related to employee termination benefits of certain employees related to the acquisition of the acquired business. As a result of the preceding, income from continuing operations, net of tax, of $22.8 million increased 25% compared to 2008

     Despite the current economic conditions, our financial condition remains strong. We continue to generate substantial cash flows from operations, have proactively managed working capital and have controlled capital spending. We currently have a debt to equity ratio of 5% and can borrow needed funds at an affordable interest rate from our untapped credit facility. While current worldwide conditions necessitate that we concentrate our efforts on maintaining our financial strengths, we believe there are many available opportunities for growth. We are pursuing these opportunities as appropriate in the current environment in order to position ourselves for when the economic recovery ultimately happens.

     Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the U.S. (GAAP). Our discussions of the financial results include Non-GAAP measures (primarily the impact of foreign currency) to provide additional information concerning our financial results that are prepared in accordance with GAAP. We believe that these non-GAAP measures provide information that is useful to the assessment of the Company’s performance and operating trends.

2009 Results of Operations compared to 2008

     Net Sales. In 2009, net sales were $257.2 million, a decrease of $12.5 million, or 5%, from 2008. Excluding the effect on currency translation, net sales decreased $.4 million as summarized in the following table:

	Year ended December 31
								Change			Change
								due to			excluding
thousands of dollars								currency			currency			%
	2009		2008		Change			translation			translation			change
Net sales
PLP-USA	$	103,910	$	111,721	$	(7,811	)	$	—		$	(7,811	)		(7	)%
Australia		27,923		27,244		679			(1,881	)		2,560			9
Brazil		30,744		30,279		465			(1,926	)		2,391			8
South Africa		10,264		9,535		729			(23	)		752			8
Canada		12,237		9,952		2,285			(750	)		3,035			30
Poland		11,148		20,602		(9,454	)		(3,823	)		(5,631	)		(27	)
All Other		60,980		60,409		571			(3,781	)		4,352			7
Consolidated	$	257,206	$	269,742	$	(12,536	)	$	(12,184	)	$	(352	)		—	%

     The decrease in PLP-USA net sales of $7.8 million, or 7%, was due to approximately 80% sales volume and 20% mix decreases. International net sales in 2009 were unfavorably affected by $12.2 million when converted to U.S. dollars, as a result of a stronger U.S dollar to certain foreign currencies. The following discussions of international net sales exclude the effect of currency translation. Australia net sales increased $2.6 million, or 9%, primarily as a result of higher volume/mix in the energy sales, an increase in BlueSky sales due to BlueSky contributing sales for the full year of 2009, and an overall strong fourth quarter 2009. Australia’s net sales were impacted by a slower economic climate for much of 2009 before a strong fourth quarter 2009. Fourth quarter 2009 net sales increased primarily due to higher energy sales compared to 2008 coupled with an increase in BlueSky sales. Brazil net sales increased $2.4 million, or 8%, as a result of energy sales volume coupled with $.7 million related to the settlement of sales tax related proceedings with their government. Brazil determined that they paid higher sales related taxes due to the country’s high index of inflation from 1988-1995. In December 2009, Brazil settled legal proceedings, receiving $.7 million in refunds. Historically these sales related taxes were an offset against net sales, and Brazil recorded these tax credits in net sales for December 2009. South Africa net sales increased $.8 million, or 8%, primarily as a result of increased volume in energy sales. Canada net sales increased $3 million, or 30%, due to higher sales volume in their markets. Poland net sales decreased $5.6 million, or 27%, due primarily to Poland’s economic downturn in their domestic markets. All Other net sales increased $4.5 million,

22

or 7%, due to an increase in sales volume. We continue to see competitive pricing pressures globally as well as a struggling global economy, which will continue to affect sales and profitability in 2010.

     Gross Profit. Gross Profit of $84.8 million for 2009 decreased $2.5 million, or 3%, compared to 2008. Excluding the effect of currency translation, gross profit increased 2% as summarized in the following table:

	Year ended December 31
								Change			Change
								due to			excluding
thousands of dollars								currency			currency			%
	2009		2008		Change			translation			translation			change
Gross profit
PLP-USA	$	33,727	$	35,973	$	(2,246	)	$	—		$	(2,246	)		(6	)%
Australia		7,703		8,534		(831	)		(557	)		(274	)		(3	)
Brazil		9,170		8,193		977			(340	)		1,317			16
South Africa		3,878		4,271		(393	)		(2	)		(391	)		(9	)
Canada		5,121		4,331		790			(354	)		1,144			26
Poland		3,273		5,471		(2,198	)		(1,148	)		(1,050	)		(19	)
All Other		21,896		20,494		1,402			(1,443	)		2,845			14
Consolidated	$	84,768	$	87,267	$	(2,499	)	$	(3,844	)	$	1,345			2	%

     PLP-USA gross profit of $33.7 million decreased by $2.2 million compared to 2008. PLP-USA gross profit decreased due to lower sales volume partially offset by slightly improved product margins. The following discussion of international gross profit excludes the effect of currency translation. The Australia gross profit decrease of $.3 million was the result of $2.1 million from higher material costs partially offset by higher net sales of $.8 million coupled with an improvement in manufacturing efficiencies. BlueSky material margins are significantly lower compared to the rest of the Australia business due to competitive pricing pressure in the Australian solar market. Brazil’s gross profit increase of $1.3 million was the result of $.7 million increase in higher sales volume. Contributing to Brazil’s overall increase in gross profit of $1.3 million was the $.7 million sales tax related settlement in December 2009 as noted in the Net Sales discussion. The South Africa gross profit decrease of $.4 million was a result of $.5 million from higher material costs coupled with lower production margins partially offset by an increase in net sales of $.3 million. Canada’s gross profit increase of $1.1 million was a result of $1.3 million from higher net sales and a $.3 million improvement in manufacturing efficiencies partially offset by an increase in material costs of $.5 million. Poland gross profit decrease of $1.1 million was a result of $1.4 million from lower sales volume coupled with a decrease in production margins of $1 million partially offset by lower material costs. The increase in All Other gross profit of $2.8 million was primarily due to a $1.8 million increase from higher net sales coupled with improved production margins.

23

     Cost and expenses. Cost and expenses for the year ended December 31, 2009 increased $2 million, or 3%, compared to 2008. Excluding the effect of currency translation, cost and expenses increased 7% as summarized in the following table:

	Year ended December 31
								Change			Change
								due to			excluding
thousands of dollars								currency			currency		%
	2009		2008		Change			translation			translation		change
Costs and expenses
PLP-USA	$	33,872	$	33,633	$	239		$	—		$	239		1	%
Australia		8,196		6,591		1,605			(224	)		1,829		28
Brazil		5,485		5,789		(304	)		(548	)		244		4
South Africa		1,588		1,235		353			(18	)		371		30
Canada		1,630		1,659		(29	)		(120	)		91		5
Poland		2,309		2,775		(466	)		(740	)		274		10
All Other		12,228		11,597		631			(932	)		1,563		13
Consolidated	$	65,308	$	63,279	$	2,029		$	(2,582	)	$	4,611		7	%

     PLP-USA costs and expenses increased $.2 million primarily due to an increase in employee related costs of $1.6 million, acquisition related costs of $1.2 million, consulting expenses of $.6 million, and repairs and maintenance of $.3 million, partially offset by a decrease in professional fees of $.9 million, travel expenses of $.3 million, and depreciation of $.1 million. This increase was also offset by a reduction in other operating income (expenses) — net due to a gain on foreign currency translations, gains on sale of capital assets, and an increase in the cash surrender values of life insurance policies. International cost and expenses for the year ended December 31, 2009 were favorably impacted by $2.6 million when international costs in local currency were translated to U.S. dollars compared to 2008. The following discussions of international costs and expenses exclude the effect of currency translation. Australia costs and expenses increased $1.8 million primarily due to $.5 million related to having a full year of BlueSky’s costs and expenses in 2009, $.4 million related to Dulmison acquisition related costs, an increase in personnel related costs and the addition of new employees related to the Dulmison acquisition. Australia also accrued $1.6 million in December 2009 for employee termination benefits for certain Dulmison employees related to the Dulmison Australia asset acquisition. Brazil costs and expenses increased $.2 million primarily due to higher personnel related costs, consulting expenses, sales commissions, and research and engineering related costs. South Africa costs and expenses increased $.4 million due to higher personnel related costs, an increase in advertising, and administrative expenses. Canada costs and expenses increased $.1 million due to personnel related costs. Poland costs and expenses increased $.3 million due to personnel related costs and travel expenses. All Other costs and expenses increased $1.6 million primarily due to personnel related costs, commissions, consulting, and research and engineering costs.

     Other income (expense). Other income (expense) for the year ended December 31, 2009 of $10.1 million increased $9.4 million compared to 2008. In 2009, we recorded a $9.1 million gain related to the acquisition of Dulmison from Tyco Electronics. The acquisition has been accounted for as a gain on acquisition of business under FASB ASC 805. The purchase price of the acquisition has been allocated to the net tangible and intangible assets acquired, with the excess of the fair value of assets acquired over the purchase price recorded as a gain.

     Income taxes. Income taxes from continuing operations for the year ended December 31, 2009 of $6.8 million were $1 million lower than 2008. The effective tax rate on income taxes from continuing operations was 22.8% and 31.2% in 2009 and 2008, respectively. The 2009 effective tax rate is lower than the 34% statutory rate primarily due to the gain on acquisition of business not recognized for tax purposes, increased earnings in jurisdictions with lower tax rates, and a decrease in unrecognized tax benefits for uncertain tax positions. The 2008 effective tax rate is lower than the 34% statutory rate primarily due to increased earnings in jurisdictions with lower tax rates and a decrease in unrecognized tax benefits for uncertain tax positions.

     Income from continuing operations, net of tax. As a result of the preceding items, income from continuing operations, net of tax, for the year ended December 31, 2009, was $22.8 million, compared to income from continuing operations, net of tax, of $17 million for 2008. Excluding the effect of currency translation, income from continuing operations, net of tax, increased 40% as summarized in the following table:

24

	Year ended December 31
								Change			Change
								due to			excluding
thousands of dollars								currency			currency			%
	2009		2008		Change			translation			translation			change
Income from continuing operations, net of tax
PLP-USA	$	4,352	$	4,877	$	(525	)	$	—		$	(525	)		(11	)%
Australia		6,212		426		5,786			(508	)		6,294		NM
Brazil		2,209		1,336		873			131			742			56
South Africa		1,296		1,980		(684	)		(3	)		(681	)		(34	)
Canada		2,038		1,537		501			(132	)		633			41
Poland		772		2,089		(1,317	)		(299	)		(1,018	)		(49	)
All Other		5,954		4,797		1,157			(277	)		1,434			30
Consolidated	$	22,833	$	17,042	$	5,791		$	(1,088	)	$	6,879			40	%

NM — not meaningful

     PLP-USA income from continuing operations, net of tax, decreased $.5 million as a result of a $2.4 million decrease in operating income partially offset by the increase in other income of $1.2 million and a decrease in income taxes of $.7 million. The following discussions of international income from continuing operations, net of tax, exclude the effect of currency translation. Australia income from continuing operations, net of tax, increased $6.3 million due primarily to the increase in other income (expense) related to the gain on acquisition of business coupled with a decrease in income taxes partially offset by a decrease in operating income of $2.1 million. Brazil income from continuing operations, net of tax, increased $.7 million primarily as a result of the increase in operating income of $1.1 million partially offset by higher interest expense and income taxes. South Africa income from continuing operations, net of tax, decreased $.7 million as a result of the decrease in operating income of $.8 million partially offset by a decrease in income taxes. Canada income from continuing operations, net of tax, increased $.6 million as a result of the increase in operating income of $.9 million partially offset by an increase in income taxes of $.2 million and a decrease in interest income. Poland income from continuing operations, net of tax, decreased $1 million as a result of a $1.3 million decrease in operating income partially offset by a decrease in income taxes and interest expense. All Other income from continuing operations, net of tax, increased $1.4 million primarily as a result of the $1.2 million increase in operating income coupled with lower income taxes.

25

2008 Results of Operations compared to 2007

     Net Sales. In 2008, net sales were a record $269.7 million, an increase of $36.5 million, or 16%, from 2007 as summarized in the following table:

	Year ended December 31
								Change
								due to
								currency						%
thousands of dollars								conversion			Net			Net
	2008		2007		Change			rate changes			change			change
Net sales
PLP-USA	$	111,721	$	103,173	$	8,548		$	—		$	8,548			8	%
Australia		27,244		29,855		(2,611	)		878			(3,489	)		(12	)
Brazil		30,279		26,236		4,043			2,684			1,359			5
South Africa		9,535		8,049		1,486			(1,676	)		3,162			39
Canada		9,952		10,620		(668	)		153			(821	)		(8	)
Poland		20,602		5,202		15,400			—			15,400		NM
All Other		60,409		50,154		10,255			1,420			8,835			18
Consolidated	$	269,742	$	233,289	$	36,453		$	3,459		$	32,994			14	%

NM — not meaningful

     The increase in PLP-USA net sales of $8.5 million, or 8%, was due primarily to sales volume increases of $2.2 million and price/mix increases of $5.9 million primarily related to our energy sales. We anticipate a flat to slight increase in sales in 2009, although we believe PLP-USA sales for the year may be negatively impacted by a continued declining economy and depressed housing market. International net sales in 2008 were favorably impacted by $3.5 million when converted to U.S. dollars, as a result of a weaker U.S. dollar to certain foreign currencies. The following discussions of international net sales exclude the effect of currency translation. Australia net sales decreased $3.5 million, or 12%, primarily as a result of lower energy volume sales compared to 2007. Brazil net sales increased $1.4 million, or 5%, primarily as a result of increased volume in energy and telecommunication sales. South Africa net sales increased $3.2 million, or 39%, due to increased sales volume in the energy market. Canada net sales decreased $.8 million, or 8%, due to lower sales volume. Poland net sales of $20.6 million increased $15.4 million due to the inclusion of their results for the entire year ended December 31, 2008, as compared to the inclusion of only four months in 2007. All Other net sales increased $8.8 million, or 18%, compared to 2007, primarily due to an increase in energy volume and the inclusion of DPW’s net sales for the entire year ended December 31, 2008 compared to only nine months in 2007. We continue to see competitive pricing pressures globally as well as a decline in the global economic markets which will continue to negatively affect sales and profitability in 2009.

26

     Gross Profit. Gross profit of $87.3 million for 2008 increased $9.4 million, or 12%, compared to 2007 as summarized in the following table:

	Year ended December 31
								Change
								due to
								currency						%
thousands of dollars								conversion			Net			Net
	2008		2007		Change			rate changes			change			change
Gross profit
PLP-USA	$	35,973	$	33,680	$	2,293		$	—		$	2,293			7	%
Australia		8,534		9,911		(1,377	)		207			(1,584	)		(16	)
Brazil		8,193		8,048		145			473			(328	)		(4	)
South Africa		4,271		3,258		1,013			(668	)		1,681			52
Canada		4,331		4,812		(481	)		64			(545	)		(11	)
Poland		5,471		828		4,643			—			4,643		NM
All Other		20,494		17,364		3,130			327			2,803			16
Consolidated	$	87,267	$	77,901	$	9,366		$	403		$	8,963			12	%

NM — not meaningful

     PLP-USA gross profit of $36 million for the year ended December 31, 2008 increased $2.3 million, or 7%, compared to 2007. PLP-USA gross profit increased $2.8 million due to higher net sales, and $2.7 million due to improved manufacturing efficiencies partially offset by higher material costs of $3.2 million. Excluding the effect of currency conversion, the Australia gross profit decrease of $1.6 million was a result of $1.2 million lower net sales and $.7 million higher per unit manufacturing costs. Excluding the effect of currency conversion, the Brazil gross profit decrease of $.3 million is primarily due to a favorable excess and obsolescence reserve adjustment of $.6 million included in the year ended December 31, 2007 offset by higher net sales. Excluding the effect of currency conversion, South Africa gross profit of $4.3 million increased $1.7 million due primarily to a $1.1 million increase in net sales. Excluding the effect of currency conversion, Canada gross profit decreased $.5 million, of which $.2 million was related to a decrease in net sales and $.4 million was related to an increase in material costs offset by improved manufacturing efficiencies. Our consolidated gross profit increased $4.6 million as a result of the Poland acquisition in September of 2007. Poland is included for the entire year of 2008 but only for four months in 2007. Excluding the effect of currency conversion, All Other gross profit increased $2.8 million primarily as a result of increased sales of $8.8 million.

27

     Cost and expenses. Costs and expenses increased $6.5 million, or 12%, compared to 2007 as summarized in the following table:

	Year ended December 31
								Change
								due to
								currency					%
thousands of dollars								conversion			Net		Net
	2008		2007		Change			rate changes			change		change
Costs and expenses
PLP-USA	$	33,633	$	31,787	$	1,846		$	—		$	1,846		6	%
Australia		6,591		5,819		772			125			647		11
Brazil		5,789		4,735		1,054			339			715		15
South Africa		1,235		1,270		(35	)		(210	)		175		14
Canada		1,659		1,586		73			(12	)		85		5
Poland		2,775		854		1,921			—			1,921	NM
All Other		11,597		10,717		880			296			584		5
Consolidated	$	63,279	$	56,768	$	6,511		$	538		$	5,973		11	%

NM — not meaningful

     PLP-USA costs and expenses increased $1.8 million primarily due to increases in personnel related expenses of $1 million, commissions of $.5 million, product testing expenses of $.3 million, tax compliance expense of $.2 million and an increase in the loss on foreign currency of $.7 million, partially offset by a $.9 million decrease in sales promotional expense. The following discussions of international costs and expenses exclude the effect of currency translation. Australia costs and expenses increased $.6 million due to increased personnel related costs and consulting fees. Brazil costs and expenses increased $.7 million primarily due to personnel related expenses. South Africa costs and expenses increased $.2 million primarily due to increased personnel related expenses and travel costs. Poland costs and expenses increased $1.9 million due to the inclusion of their costs for the entire year ended December 31, 2008 compared to only four months in 2007. Excluding All Other costs and expenses increased $.6 million primarily due to a $.2 million increase in personnel related expenses and a $.4 million increase related to the inclusion of DPW’s costs and expenses for the entire year ended December 31, 2008 compared to only nine months in 2007.

     Other income. Other income for the year ended December 31, 2008 of $.8 million increased $.6 million compared to 2007. The primary reason for the increase in other income related to the discovery of natural gas at PLP-USA located on our corporate headquarters property in Mayfield Village, Ohio. Production of the natural gas well commenced in May 2008. The increase related to the natural gas well was offset against a decrease in interest income compared to 2007.

     Income taxes. Income taxes from continuing operations for the year ended December 31, 2008 of $7.7 million were $.2 million higher than 2007. The effective tax rate in 2008 on income taxes from continuing operations was 31.2% compared to 35.2% in 2007. The 2008 effective tax rate is lower than the 34% statutory rate primarily due to increased earnings in jurisdictions with lower tax rates and a decrease in unrecognized tax benefits for uncertain tax positions. The 2007 effective tax rate is higher than the 34% statutory rate primarily due to the increase in the valuation allowance for foreign net operating losses that may not be utilized.

     Income from continuing operations, net of tax. As a result of the preceding items, income from continuing operations, net of tax, was $17.0 million, or $3.17 per diluted share, compared to income from continuing operations of $13.8 million, or $2.57 per diluted share for 2007 as summarized in the following table:

28

	Year ended December 31
									Change
									due to
									currency						%
thousands of dollars									conversion			Net			Net
	2008		2007			Change			rate changes			change			change
Income from continuing operations, net of tax
PLP-USA		4,877	$	4,018		$	859		$	—		$	859			21	%
Australia		426		1,736			(1,310	)		(27	)		(1,283	)		(74	)
Brazil		1,336		2,286			(950	)		63			(1,013	)		(44	)
South Africa		1,980		1,185			795			(306	)		1,101			93
Canada		1,537		1,811			(274	)		61			(335	)		(18	)
Poland		2,089		(7	)		2,096			—			2,096		NM
All Other		4,797		2,791			2,006			(20	)		2,026			73
Consolidated	$	17,042	$	13,820		$	3,222		$	(229	)	$	3,451			25	%

NM — not meaningful

     PLP-USA income from continuing operations, net of tax, of $4.9 million increased $.9 million compared to 2007 primarily as a result of the $.8 million increase in operating income, an increase in other income of $.3 million, offset by an increase in income tax expense. Australia income from continuing operations, net of tax, of $.4 million decreased $1.3 million primarily due to the $2 million decrease in operating income being partially offset by lower other expenses and a reduction in income taxes of $.6 million. Brazil income from continuing operations, net of tax, of $1.3 million decreased $1 million as a result of the $1.2 million decrease in operating income being partially offset by lower income taxes. South Africa income from continuing operations, net of tax, of $2 million increased $.8 million as a result of the $1 million increase in operating profit being partially offset by a $.2 million increase in income tax expense. Canada income from continuing operations, net of tax, of $1.5 million decreased $.3 million as a result of the $.5 million decrease in operating income partially offset by a reduction in income tax expense. Poland income from continuing operations, net of tax, of $2.1 million is a result of $2.7 million in operating income being partially offset by other expense, income taxes, and minority interest. All Other income from continuing operations, net of tax, of $4.8 million increased $2 million primarily as a result of the $2 million increase in operating income and a $.1 million increase in other income partially offset by a $.1 million increase in income taxes compared to 2007.

Working Capital, Liquidity and Capital Resources

     Cash increased $4.2 million for the year ended December 31, 2009. Net cash provided by operating activities was $29 million. The major investing and financing uses of cash were capital expenditures of $10.7 million, business acquisitions of $13.2 million, net of cash acquired, dividends of $4.3 million, offset by net debt borrowings of $.8 million and $.8 million received from escrow from the sale of SMP.

     Net cash provided by operating activities increased $11.7 million compared to 2008 primarily as a result of an increase in net income of $5.8 million (which includes a non-cash gain on acquisition of business of $9.1 million), an increase in operating assets (net of operating liabilities) of $12.9 million partially offset by a decrease in non-cash items of $7 million.

     Net cash used in investing activities of $22.7 million represents an increase of $20.3 million when compared to cash used in investing activities in 2008. In December 2009, we purchased the Dulmison business from Tyco Electronics for $16 million, including cash acquired from the acquisition of $4.1 million. We realized a gain of $9.1 million on our purchase of the Dulmison business. In October 2009, we acquired a 33.1% interest in Proxisafe Ltd. for an initial cash payment of $.5 million, an entity formed to design and commercialize new industrial safety equipment. Additional payouts for acquisitions during 2009 consisted of $.8 million related to DPW. In May 2008, we sold SMP for $11.7 million, net of transaction expenses, with an after-tax gain of $.8 million and a holdback of $1.5 million held in escrow for a period of one year. Also in May 2008, we formed a joint venture with BlueSky Energy Pty. Ltd. for an initial cash payment of $.3 million. Additional payouts for acquisitions

29

during 2008 consisted of $.4 million related to DPW and $2.8 million for Belos mostly due to earn out payments. Capital expenditures increased $.6 million in the year ended December 31, 2009 when compared to the same period in 2008 due mostly to a building expansion at our Mexican subsidiary.

     Cash used in financing activities was $3.2 million compared to $13.1 million in 2008. This decrease was primarily a result of common shares repurchased of $7.5 million during 2008 and $2.7 million higher debt repayments in 2008 compared to 2009.

     We have commitments under operating leases primarily for office and manufacturing space, transportation equipment, office and computer equipment and capital leases primarily for equipment. One such lease is for our aircraft with a lease commitment through April 2012. Under the terms of the lease, we maintain the risk to make up a deficiency from market value attributable to damage, extraordinary wear and tear, excess air hours or exceeding maintenance overhaul schedules required by the Federal Aviation Administration. At the present time, we believe our risks, if any, to be immaterial because the estimated market value of the aircraft approximates its residual value.

     Our financial position remains strong and our current ratio at December 31, 2009 was 3.0 to 1 compared to 3.2 to 1 at December 31, 2008. Our current ratio decreased primarily due to increases in debt, trade payables and accrued expenses related to business acquisitions. At December 31, 2009, our unused balance under our main credit facility was $20 million and our bank debt to equity percentage was 4%. The revolving credit agreement contains, among other provisions, requirements for maintaining levels of working capital, net worth and profitability. At December 31, 2009, we were in compliance with these covenants. On February 5, 2010, we entered into a new revolving credit agreement of $30 million, carrying interest at LIBOR plus 1.25% with a term expiring January 2013. We believe our future operating cash flows will be more than sufficient to cover debt repayments, other contractual obligations, capital expenditures and dividends. In addition, we believe our untapped borrowing capacity, provides substantial financial resources. If we were to incur significant additional indebtedness, we expect to be able to meet liquidity needs under the credit facilities. We do not believe we would increase our debt to a level that would have a material adverse impact upon results of operations or financial condition.

     Contractual obligations and other commercial commitments are summarized in the following tables:

	Payments Due by Period
			Less than 1						After 5
Contractual Obligations	Total		year		1-3 Years		4-5 years		years
Thousands of dollars
Notes payable to bank (A)	$	3,303	$	3,303	$	—	$	—	$	—
Long-term debt (B)		4,910		1,559		2,943		408		—
Capital leases		239		105		117		17		—
Operating leases		14,776		2,264		2,379		1,133		9,000
Purchase commitments		3,065		3,065		—		—		—
Pension contribution and other retirement plans (C)		—		—		—		—		—
Income taxes payable, non-current (D)		—		—		—		—		—

	Amount of Commitment Expiration by Period
			Less than 1						After 5
Other Commercial Commitments	Total		year		1-3 years		4-5 years		years
Thousands of dollars
Letters of credit	$	9,750	$	8,767	$	911	$	72	$	—
Guarantees		2,566		2,496		70		—		—

(A)	Interest on short-term debt is included in the table at an interest rate of 4.2% in effect at December 31, 2009.
(B)	Interest on long-term debt is included in the table at interest rates from .7% to 6.8% based on the variable interest rates in effect at December 31, 2009.
(C)	Amount represents the expected contribution to the Company’s defined benefit pension plan in 2009. Future

30

expected amounts have not been disclosed as such amounts are subject to change based on performance of the assets in the plan as well as the discount rate used to determine the obligation. At December 31, 2009, the Company’s unfunded contractual obligation was $8.7 million. The Company’s Supplemental Profit Sharing Plan accrued liability at December 31, 2009 was $1.7 million. Future expected amounts have not been disclosed as the Company is unable to estimate the years in which benefit payments may occur. (D) As of December 31, 2009, there were $.8 million of tax liabilities, including interest, related to unrecognized tax benefits. Because of the high degree of uncertainty regarding the timing of future cash outflows associated with these liabilities, if any, the Company is unable to estimate the years in which cash settlement may occur with the respective tax authorities.

Critical Accounting Policies and Estimates

     Our discussion and analysis of our financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions.

     Critical accounting policies are defined as those that are reflective of significant judgment and uncertainties, and potentially may result in materially different outcomes under different assumptions and conditions.

Sales Recognition

     We record sales when products are shipped and the title and risk of loss has passed to unaffiliated customers. Revenue related to shipping and handling costs billed-to customers are included in net sales and the related shipping and handling costs are included in cost of products sold.

Receivable Allowances

     Allowance for Doubtful Accounts

     We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We record estimated allowances for uncollectible accounts receivable based upon the number of days the accounts are past due, the current business environment, and specific information such as bankruptcy or liquidity issues of customers. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. During 2009, we recorded a provision for doubtful accounts of $.3 million. The allowance for doubtful accounts represents approximately 2% of our trade receivable at December 31, 2009 and 1% of our trade receivable at December 31, 2008.

     Reserve for credit memos

     We maintain an allowance for future sales credits related to sales recorded during the year. Our estimated allowance is based on historical sales credits issued in the subsequent year related to the prior year and any significant open return good authorizations as of the balance sheet date. Our allowance is updated on a quarterly basis. The reserve for out of period credits represents less than 1% of our trade receivables at December 31, 2009 and approximately 1% of our trade receivables at December 31, 2008.

Excess and Obsolescence Reserves

     We provide excess and obsolescence reserves to state inventories at the lower of cost or estimated market value. We identify inventory items which have had no usage or are in excess of the usages over the historical 12 to 36 months. A management team with representatives from marketing, manufacturing, engineering and finance reviews these inventory items, determines the disposition of the inventory and assesses the estimated market value based on their knowledge of the product and market conditions. These conditions include, among other things, future demand for product, product utility, unique customer order patterns or unique raw material purchase patterns,

31

changes in customer and quality issues. At December 31, 2009 and 2008, the allowance for excess and obsolete inventory was 8% and 5% of gross inventory. If the impact of market conditions worsens from those projected by management, additional inventory write-downs may be necessary.

Impairment of Long-Lived Assets

     We record impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the discounted cash flows estimated to be generated by those assets are less than the carrying value of those items. Our cash flows are based on historical results adjusted to reflect the best estimate of future market and operating conditions. The net carrying value of assets not recoverable is then reduced to fair value. The estimates of fair value represent the best estimate based on industry trends and reference to market rates and transactions.

Goodwill

     We perform our annual impairment test for goodwill and intangibles with indefinite lives utilizing a discounted cash flow methodology, market comparables, and an overall market capitalization reasonableness test in computing fair value by reporting unit. We then compare the fair value of the reporting unit with its carrying value to assess if goodwill and other indefinite life intangibles have been impaired. Based on the assumptions as to growth, discount rates and the weighting used for each respective valuation methodology, results of the valuations could be significantly changed. However, we believe that the methodologies and weightings used are reasonable and result in appropriate fair values of the reporting units.

     Our measurement date for our annual impairment test is January 1 of each year. We perform interim impairment tests if trigger events or changes in circumstances indicate the carrying amount may be impaired. There were no trigger events during 2009 and as such, only an annual impairment test was performed.

Deferred Tax Assets

     Deferred taxes are recognized at currently enacted tax rates for temporary differences between the financial reporting and income tax bases of assets and liabilities and operating loss and tax credit carryforwards. We established a valuation allowance to record our deferred tax assets at an amount that is more likely than not to be realized. In the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of their recorded amount, an adjustment to the valuation allowance would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the valuation allowance would be charged to expense in the period such determination was made.

Uncertain Tax Positions

     We identify tax positions taken on the federal, state, local and foreign income tax returns filed or to be filed. A tax position can include: a reduction in taxable income reported in a previously filed tax return or expected to be reported on a future tax return that impacts the measurement of current or deferred income tax assets or liabilities in the period being reported; a decision not to file a tax return; an allocation or a shift of income between jurisdictions; the characterization of income or a decision to exclude reporting taxable income in a tax return; or a decision to classify a transaction, entity or other position in a tax return as tax exempt. We determine whether a tax position is an uncertain or a routine business transaction tax position that is more-likely-than-not to be sustained at the full amount upon examination.

     Under ASC 740 (formerly FIN 48), tax benefits from uncertain tax positions that reduce our current or future income tax liability, are reported in our financial statements only to the extent that each benefit was recognized and measured under a two step approach. The first step requires us to assess whether each tax position based on its technical merits and facts and circumstances as of the reporting date, is more-likely-than-not to be sustained upon examination. The second step measures the amount of tax benefit that we recognize in the financial statements, based on a cumulative probability approach. A tax position that meets the more-likely-than-not threshold that is not highly certain is measured based on the largest amount of benefit that is greater than 50% likely

32

of being realized upon ultimate settlement with the tax authority, assuming that the tax authority has examined the position and has full knowledge of all relevant information.

     ASC 740 requires subjectivity of judgments to identify outcomes and to assign probability in order to estimate the settlement amount. We provide estimates in order to determine settlement amounts. During the year ended December 31, 2009, we recognized a benefit of $.6 million of uncertain tax positions. At December 31, 2009, the total reserve for uncertain tax positions and related interest is $1.3 million.

Pensions

     We record obligations and expenses related to pension benefit plans based on actuarial valuations, which include key assumptions on discount rates, expected returns on plan assets and compensation increases. These actuarial assumptions are reviewed annually and modified as appropriate. The effect of modifications is generally recorded or amortized over future periods. The discount rate of 6.0% at December 31, 2009 reflects an analysis of yield curves as of the end of the year and the schedule of expected cash needs of the plan. The expected long-term return on plan assets of 8.0% reflects the plan’s historical returns and represents our best estimate of the likely future returns on the plan’s asset mix. We believe the assumptions used in recording obligations under the plans are reasonable based on prior experience, market conditions and the advice of plan actuaries. However, an increase in the discount rate would decrease the plan obligations and the net periodic benefit cost, while a decrease in the discount rate would increase the plan obligations and the net periodic benefit cost. In addition, an increase in the expected long-term return on plan assets would decrease the net periodic pension cost, while a decrease in expected long-term return on plan assets would increase the net periodic pension cost.

Recently Adopted Accounting Pronouncements

     In December 2008, the FASB issued an accounting standard regarding a company’s disclosures about postretirement benefit plan assets. This standard requires additional disclosures about plan assets for sponsors of defined benefit pension and postretirement plans including expanded information regarding investment strategies, major categories of plan assets, and concentrations of risk within plan assets. Additionally, this standard requires disclosures similar to those required for fair value measurements and disclosures under ASC 820 with respect to the fair value of plan assets such as the inputs and valuation techniques used to measure fair value and information with respect to classification of plan assets in terms of the hierarchy of the source of information used to determine their value. The disclosures under this standard are required beginning with the annual period ended December 31, 2009. The additional disclosures are included in Note C in the Notes To Consolidated Financial Statements.

     The FASB issued a standard in June 2009 that established the FASB ASC that amended the hierarchy of U.S. generally accepted accounting principles (GAAP). The ASC became the single source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification does not change US GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. Following this statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, the FASB will issue Accounting Standards Updates (ASU). All other non-grandfathered non-SEC accounting literature not included in the Codification will become non authoritative. We adopted this standard effective as of September 30, 2009. The adoption did not impact our financial condition, results of operations, or cash flow, however, throughout the notes to the consolidated financial statements references that were previously made to various former authoritative U.S. GAAP pronouncements have been changed to coincide with the appropriate section of the ASC.

     In December 2007, the FASB issued a new business combinations standard codified within ASC 805, “Business Combinations” (ASC 805). ASC 805 revises the principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired in a business combination or gain from a bargain purchase. ASC 805 also revises the principles and requirements for how the acquirer determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This topic became effective for us as of January 1, 2009. The adoption of ASC 805 had a significant

33

impact due to the recent acquisition of Dulmison (see Note M) and will impact our consolidated financial statements to the extent we enter into future business acquisitions.

     In December 2007, the FASB adopted ASC 810, consolidation requirements for reporting noncontrolling interests in financial statements. This standard establishes accounting and reporting for the noncontrolling interest in a subsidiary and for deconsolidation of a subsidiary. It also amends certain consolidation procedures for consistency with the requirements of ASC 805. This topic became effective on January 1, 2009 and is applied prospectively to future business combinations. The impact to the Company is the retroactive presentation and disclosure requirements for all periods presented on the Company’s consolidated financial statements of noncontrolling interests.

     On January 1, 2009, we adopted updated guidance included in ASC 805. This guidance amends and clarifies the initial recognition and measurement, subsequent measurement and accounting and related disclosures of assets and liabilities arising from contingencies in a business combination. The adoption of this guidance did not impact our consolidated financial statements.

     In May 2009, the FASB amended ASC Topic 855, “Subsequent Events” (ASC 855), which amended principles and requirements for subsequent events. ASC 855 details the period after the balance sheet date during which the Company should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which the Company should recognize events or transactions occurring after the balance sheet date in its financial statements and the required disclosures for such events. ASC 855 is effective for interim or annual reporting periods ending after June 15, 2009. These amendments did not have an impact on our financial condition, results of operations, or cash flows.

     In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05, “Measuring Liabilities at Fair Value” (ASU 2009-05). This update provides amendments to ASC Topic 820-10 for the fair value measurement of liabilities when a quoted price in an active market is not available. The adoption of ASU 2009-05 did not have a material effect on our financial condition, results of operations, or cash flow.

Recently Issued Accounting Pronouncements

     In June 2009, the FASB updated guidance included in FASB ASC 810-10, related to the consolidation of variable interest entities. This guidance will require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. In addition, this updated guidance amends the quantitative approach for determing the primary beneficiary of a variable interest entity. ASC 810-10 amends certain guidance for determining whether an entity is a variable interest entity and adds additional reconsideration events for determining whether an entity is a variable interest entity. Further, this guidance requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. This updated guidance is effective as of the beginning of the first annual reporting period and interim reporting periods that begin after November 15, 2009. This adoption of this guidance is not expected to have an impact on the consolidated financial statements.

     In October 2009, the FASB issued Accounting Standards Update No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements — a consensus of the FASB Emerging Issues Task Force (ASU 2009-13). ASU 2009-13 addresses the accounting for sales arrangements that include multiple products or services by revising the criteria for when deliverables may be accounted for separately rather than as a combined unit. Specifically, this guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is necessary to separately account for each product or service. This hierarchy provides more options for establishing selling price than existing guidance. ASU 2009-13 is required to be applied prospectively to new or materially modified revenue arrangements in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. We are currently evaluating the effect the adoption of ASU 2009-13 will have on our financial position, results of operations, cash flows, and related disclosures; however no significant effect is expected.

34

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

     The Company operates manufacturing facilities and offices around the world and uses fixed and floating rate debt to finance the Company’s global operations. As a result, the Company is subject to business risks inherent in non-U.S. activities, including political and economic uncertainty, import and export limitations and market risk related to changes in interest rates and foreign currency exchange rates. The Company believes the political and economic risks related to the Company’s international operations are mitigated due to the stability of the countries in which the Company’s largest international operations are located.

     The Company had no derivative instruments outstanding at December 31, 2009. The Company does not hold derivatives for trading purposes.

     The Company is exposed to market risk, including changes in interest rates. The Company is subject to interest rate risk on its variable rate revolving credit facilities and term notes, which consisted of borrowings of $7.6 million at December 31, 2009. A 100 basis point increase in the interest rate would have resulted in an increase in interest expense of approximately $.1 million for the year ended December 31, 2009.

     The Company’s primary currency rate exposures are related to foreign denominated debt, intercompany debt, forward exchange contracts, foreign denominated receivables and cash and short-term investments. A hypothetical 10% change in currency rates would have a favorable/unfavorable impact on fair values of $3.4 million and on income before tax of less than $.1 million.

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Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
of Preformed Line Products Company

We have audited the accompanying consolidated balance sheets of Preformed Line Products Company as of December 31, 2009 and 2008, and the related statements of consolidated income, cash flows, and shareholders’ equity for the years then ended. Our audits also included the financial statement schedule for the years ended December 31, 2009 and 2008 listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Preformed Line Products Company at December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule for the years ended December 31, 2009 and 2008, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

As discussed in Note B to the financial statements, in 2009 the Company changed its method of computing depreciation from an accelerated method to a straight-line method for the Company’s assets in the United States. Also, as discussed in Note A to the financial statements, in 2009 the Company changed its method of accounting for business combinations and noncontrolling interests.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Preformed Line Products Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 15, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Cleveland, Ohio
March 15, 2010

36

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Preformed Line Products Company

We have audited the accompanying consolidated statements of income, shareholders’ equity and cash flows of Preformed Line Products Company and subsidiaries (the “Company”) for the year ended December 31, 2007. Our audit also included the consolidated financial statement schedule for the year ended December 31, 2007 listed in the Index at Item 15(a). The financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such 2007 consolidated financial statements of Preformed Line Products Company and subsidiaries present fairly, in all material respects, the results of their operations and their cash flows for the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such 2007 consolidated financial statement schedule, when considered in relation to the basic 2007 consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note N to the consolidated financial statements, the accompanying 2007 financial statements and related disclosures have been retrospectively adjusted for discontinued operations and a change in the composition of reportable segments.

As discussed in Note A to the consolidated financial statements, on January 1, 2009, the Company changed its method of accounting for noncontrolling interests and retrospectively adjusted all periods presented in the consolidated financial statements.

/s/ Deloitte & Touche LLP

Cleveland, Ohio
April 4, 2008

(March 13, 2009 as to Notes N and K)

(March 15, 2010 as to Note A)

37

PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS

	December 31
	2009			2008
	(Thousands of dollars, except share
	and per share data)
ASSETS
Cash and cash equivalents	$	24,097		$	19,869
Accounts receivable, less allowances of $995 ($972 in 2008)		49,245			36,899
Inventories — net		56,036			48,412
Deferred income taxes		3,256			2,786
Prepaids		4,263			1,313
Other current assets		2,062			3,391
TOTAL CURRENT ASSETS		138,959			112,670
Property and equipment — net		67,766			55,940
Patents and other intangibles — net		8,087			3,858
Goodwill		6,925			5,520
Deferred income taxes		4,358			6,943
Other assets		9,277			5,944
TOTAL ASSETS	$	235,372		$	190,875
LIABILITIES AND SHAREHOLDERS’ EQUITY
Notes payable to banks	$	3,181		$	3,101
Current portion of long-term debt		1,330			494
Trade accounts payable		18,764			14,632
Accrued compensation and amounts withheld from employees		8,345			6,606
Accrued expenses and other liabilities		8,375			4,574
Accrued profit-sharing and other benefits		3,890			3,687
Dividends payable		1,076			1,054
Income taxes payable and deferred income taxes		1,379			1,100
TOTAL CURRENT LIABILITIES		46,340			35,248
Long-term debt, less current portion		3,099			2,653
Unfunded pension obligation		8,678			11,303
Income taxes payable, noncurrent		1,898			1,405
Deferred income taxes		1,515			725
Other noncurrent liabilities		3,021			2,540
SHAREHOLDERS’ EQUITY
PLPC Shareholders’ equity:
Common stock — $2 par value per share, 15,000,000 shares authorized, 5,248,298 and 5,223,830 issued and outstanding, net of 554,059 and 551,059 treasury shares at par, respectively		10,497			10,448
Paid in capital		5,885			3,704
Retained earnings		165,953			146,624
Accumulated other comprehensive loss		(11,369	)		(24,511	)
TOTAL PLPC SHAREHOLDERS’ EQUITY		170,966			136,265
Noncontrolling interest		(145	)		736
TOTAL SHAREHOLDERS’ EQUITY		170,821			137,001
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	235,372		$	190,875

See notes to consolidated financial statements.

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PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED INCOME

	Year ended December 31
	2009			2008			2007
	(Thousands of dollars, except share and per share data)
Net sales	$	257,206		$	269,742		$	233,289
Cost of products sold		172,438			182,475			155,388
GROSS PROFIT		84,768			87,267			77,901
Costs and expenses
Selling		22,702			23,555			22,623
General and administrative		33,993			30,014			26,416
Research and engineering		9,216			8,870			7,192
Other operating (income) expenses — net		(603	)		840			338
Goodwill impairment		—			—			199
		65,308			63,279			56,768
OPERATING INCOME		19,460			23,988			21,133
Other income (expense)
Gain on acquisition of business		9,087			—			—
Interest income		380			846			1,088
Interest expense		(523	)		(544	)		(595	)
Other income (expense)		1,189			470			(305	)
		10,133			772			188
INCOME BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS		29,593			24,760			21,321
Income taxes		6,760			7,718			7,501
INCOME FROM CONTINUING OPERATIONS, NET OF TAX		22,833			17,042			13,820
Income from discontinued operations, net of tax		—			869			393
NET INCOME		22,833			17,911			14,213
Net income (loss) attributable to noncontrolling interest, net of tax		(524	)		288			54
NET INCOME ATTRIBUTABLE TO PLPC	$	23,357		$	17,623		$	14,159
BASIC EARNINGS PER SHARE
Income per share from continuing operations attributable to PLPC common shareholders	$	4.46		$	3.17		$	2.57
Discontinued operations attributable to PLPC common shareholders	$	—		$	0.17		$	0.07
Net income attributable to PLPC common shareholders	$	4.46		$	3.34		$	2.64
DILUTED EARNINGS PER SHARE
Income per share from continuing operations attributable to PLPC shareholders	$	4.35		$	3.14		$	2.54
Discontinued operations attributable to PLPC common shareholders	$	—		$	0.16		$	0.07
Net income attributable to PLPC common shareholders	$	4.35		$	3.30		$	2.61
Cash dividends declared per share	$	0.80		$	0.80		$	0.80
Weighted-average number of shares outstanding — basic		5,232			5,279			5,372
Weighted-average number of shares outstanding — diluted		5,366			5,339			5,416
Amount attributable to PLPC common shareholders
Income from continuing operations, net of tax	$	23,357		$	16,754		$	13,766
Discontinued operations, net of tax		—			869			393
Net Income	$	23,357		$	17,623		$	14,159
See notes to consolidated financial statements.

39

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED CASH FLOWS

	Year ended December 31
	2009			2008			2007
	(Thousands of dollars)
OPERATING ACTIVITIES
Net income	$	22,833		$	17,911		$	14,213
Less: income from discontinued operations		—			869			393
Income from continuing operations		22,833			17,042			13,820
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		7,249			8,549			7,414
Provision for accounts receivable allowances		546			586			938
Provision for inventory reserves		2,395			1,161			22
Deferred income taxes		682			(845	)		(326	)
Share-based compensation expense		1,962			507			237
Excess tax benefits from share-based awards		(122	)		(56	)		(253	)
Goodwill impairment		—			—			199
Net investment in life insurance		(489	)		50			(18	)
Gain on acquisition of business		(9,087	)		—			—
Other — net		(232	)		(41	)		69
Changes in operating assets and liabilities:
Accounts receivable		(594	)		(4,603	)		(4,871	)
Inventories		922			(9,499	)		(4,972	)
Trade accounts payables and accrued liabilities		3,750			5,663			3,100
Income taxes payable		781			(2,251	)		(551	)
Other — net		(1,581	)		1,048			114
NET CASH PROVIDED BY OPERATING ACTIVITIES		29,015			17,311			14,922
INVESTING ACTIVITIES
Capital expenditures		(10,667	)		(10,011	)		(9,231	)
Business acquisitions, net of cash acquired		(13,199	)		(3,839	)		(8,438	)
Proceeds from the sale of discontinued operations		750			11,105			—
Proceeds from the sale of property and equipment		422			333			548
Proceeds on life insurance		3,082			—			—
Payments on life insurance		(3,082	)		—			(149	)
NET CASH USED IN INVESTING ACTIVITIES		(22,694	)		(2,412	)		(17,270	)
FINANCING ACTIVITIES
Increase (decrease) in notes payable to banks		—			(486	)		(528	)
Proceeds from the issuance of long-term debt		1,330			6,984			1,379
Payments of long-term debt		(529	)		(8,363	)		(1,456	)
Dividends paid		(4,271	)		(4,247	)		(4,295	)
Excess tax benefits from share-based awards		122			56			253
Proceeds from issuance of common shares		352			452			735
Purchase of common shares for treasury		(168	)		(7,457	)		(651	)
NET CASH USED IN FINANCING ACTIVITIES		(3,164	)		(13,061	)		(4,563	)
Effects of exchange rate changes on cash and cash equivalents		1,071			(4,551	)		1,014
Net increase (decrease) in cash and cash equivalents		4,228			(2,713	)		(5,897	)
NET CASH (USED IN) PROVIDED BY DISCONTINUED OPERATIONS
Operating cash flows		—			958			(252	)
Investing cash flows		—			(1,768	)		(408	)
NET CASH USED IN DISCONTINUED OPERATIONS		—			(810	)		(660	)
Cash and cash equivalents at beginning of year		19,869			23,392			29,949
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	24,097		$	19,869		$	23,392

See notes to consolidated financial statements.

40

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ EQUITY

										Accumulated Other
										Comprehensive Income (Loss)
				Additional						Cumulative			Unrecognized
	Common			Paid in			Retained			Translation			Pension			Non-controlling
	Shares			Capital			Earnings			Adjustment			Benefit Cost			interests			Total
	(In thousands, except share and per share data)
Balance at January 1, 2007	$	10,721		$	1,562		$	131,949		$	(10,758	)	$	(2,326	)	$	—		$	131,148
Noncontrolling interest of business acquisition																	850			850
Net income								14,159									54			14,213
Foreign currency translation adjustment											7,910									7,910
Recognized net acturial loss net of tax provision of $39														66						66
Gain on unfunded pension obligations net of tax provision of $597														1,008						1,008
Total comprehensive income																				23,197
Cumulative effect adjustment to initially apply SFAS 158, net of tax benefit of $1,355								(845	)											(845	)
Share-based compensation					237															237
Excess tax benefits from share-based awards					253															253
Purchase of 13,022 common shares		(26	)					(625	)											(651	)
Issuance of 33,719 common shares		67			668															735
Cash dividends declared — $.80 per share								(4,299	)											(4,299	)
Balance at December 31, 2007		10,762			2,720			140,339			(2,848	)		(1,252	)		904			150,625
Noncontrolling interest of business acquisition																	234			234
Net income								16,984									288			17,272
Acquisition of noncontrolling interest								639									(639	)		—
Foreign currency translation adjustment											(15,419	)					(51	)		(15,470	)
Recognized net acturial loss net of tax provision of $23														39						39
Loss on unfunded pension obligations net of tax benefit of $2,942														(5,031	)					(5,031	)
Total comprehensive income																				(3,190	)
Share-based compensation					507			(18	)											489
Excess tax benefits from stock based awards					56															56
Purchase of 172,726 common shares		(345	)					(7,112	)											(7,457	)
Issuance of 15,600 common shares		31			421															452
Cash dividends declared — $.80 per share								(4,208	)											(4,208	)
Balance at December 31, 2008		10,448			3,704			146,624			(18,267	)		(6,244	)		736			137,001
Net income								23,357									(524	)		22,833
Acquisition of noncontrolling interest					(200	)		364									(364	)		(200	)
Foreign currency translation adjustment											11,679						7			11,686
Recognized net actuarial loss net of tax provision of $207														355						355
Gain on unfunded pension obligations net of tax benefit of $646														1,108						1,108
Total comprehensive income																				35,782
Share-based compensation					1,962			(103	)											1,859
Excess tax benefits from stock based awards					122															122
Purchase of 3,000 common shares		(6	)					(99	)											(105	)
Issuance of 27,468 common shares		55			297															352
Cash dividends declared — $.80 per share								(4,190	)											(4,190	)
Balance at December 31, 2009	$	10,497		$	5,885		$	165,953		$	(6,588	)	$	(4,781	)	$	(145	)	$	170,821

See notes to consolidated financial statements.

41

PREFORMED LINE PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tables in thousands of dollars, except share and per share data, unless specifically noted)

Note A — Significant Accounting Policies

Nature of Operations

     Preformed Line Products Company and subsidiaries (the “Company”) is a designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for the energy, telecommunication, cable operators, data communication and other similar industries. The Company’s primary products support, protect, connect, terminate and secure cables and wires. The Company also provides solar hardware systems and mounting hardware for a variety of solar power applications. The Company’s customers include public and private energy utilities and communication companies, cable operators, financial institutions, governmental agencies, contractors and subcontractors, distributors and value-added resellers. The Company serves its worldwide markets through strategically located domestic and international manufacturing facilities.

Consolidation

     The consolidated financial statements include the accounts of the Company and its subsidiaries where ownership is greater than 50%. All intercompany accounts and transactions have been eliminated upon consolidation.

Noncontrolling Interests

     During 2009, the Company acquired an additional 4.09% of Belos SA (Belos), a Polish company, for a total ownership interest of 96.13% of the issue and outstanding shares of Belos. During 2008, the Company entered into a Joint Venture agreement to form a joint venture between the Company’s Australian subsidiary, Preformed Line Products Australia Pty Ltd and BlueSky Energy Pty Ltd. The Company includes Belos and the BlueSky joint venture accounts in its consolidated financial statements, and the noncontrolling interests in Belos and BlueSky income and net assets are reported in the Noncontrolling Interests lines of the Statements of Consolidated Income and the Consolidated Balance Sheets, respectively.

Investments in Foreign Joint Ventures

     Investments in joint ventures, where the Company owns between 20% and 50%, or where the Company does not have control but has the ability to exercise significant influence over operations or financial policies, are accounted for by the equity method. During 2009, the Company acquired a 33.3% investment in Proxisafe Ltd., located in Calgary, Alberta. The Company accounts for its joint venture interest in Proxisafe accounts using the equity method.

Cash and Cash Equivalents

     Cash equivalents are stated at fair value and consist of highly liquid investments with original maturities of twelve months or less at the time of acquisition.

Receivable Allowances

     The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowances for uncollectible accounts receivable is based upon the number of days the accounts are past due, the current business environment, and specific information such as bankruptcy or liquidity issues of customers. The Company also maintains an allowance for sales returns related to sales recorded during the year. The estimated allowance is based on historical sales returns in the subsequent year related to the prior year and any significant open return good authorizations as of the balance sheet date.

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Inventories

     The Company uses the last-in, first-out (LIFO) method of determining cost for the majority of its material portion of inventories in PLP-USA. All other inventories are determined by the first-in, first-out (FIFO) or average cost methods. Inventories are carried at the lower of cost or market.

Fair Value of Financial Instruments

     Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) 825, “Disclosures about Fair Value of Financial Instruments”, requires disclosures of the fair value of financial instruments. The carrying value of the Company’s current financial instruments, which include cash and cash equivalents, accounts receivable, accounts payable and short-term debt, approximates its fair value because of the short-term maturity of these instruments. At December 31, 2009, the fair value of the Company’s long-term debt was estimated using discounted cash flows analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Based on the analysis performed, the carrying value of the Company’s long-term debt approximates fair value at December 31, 2009.

Property, Plant and Equipment and Depreciation

     Property, plant, and equipment is recorded at cost. Depreciation for the domestic and international operation’s assets is computed using the straight line method over the estimated useful lives. The estimated useful lives used, when purchased new, are: land improvements, ten years; buildings, forty years; building improvements, five to forty years; and machinery and equipment, three to ten years. Appropriate reductions in estimated useful lives are made for property, plant and equipment purchased in connection with an acquisition of a business or in a used condition when purchased. Depreciation for the Company’s PLP-USA assets prior to January 1, 2009 was computed using accelerated methods over the estimated useful lives, with the exception of personal computers, which were depreciated over three years using the straight-line method. Depreciation for the remaining domestic and international operation’s assets prior to January 1, 2009 were computed using the straight line method over the estimated useful lives. Effective January 1, 2009, the Company changed its method of computing depreciation from accelerated methods to the straight-line method for its PLP-USA assets. See Note B —Other Financial Statement Information for further details.

Long-Lived Assets

     The Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that the carrying value of the assets might be impaired and the discounted future cash flows estimated to be generated by such assets are less than the carrying value. The Company’s cash flows are based on historical results adjusted to reflect the Company’s best estimate of future market and operating conditions. The net carrying value of assets not recoverable is then reduced to fair value. The estimates of fair value represent the Company’s best estimate based on industry trends and reference to market rates and transactions. The Company did not record any impairments to long-lived assets during the year ended December 31, 2009.

Goodwill and Other Intangibles

     Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests. Patents and other intangible assets with finite lives represent primarily the value assigned to patents and land use rights acquired with purchased businesses. Patents and land use rights are amortized using the straight-line method over their useful lives. Customer relationship and trademark intangibles are amortized using a projected cash flow basis over the period in which the economic benefits of the intangibles are consumed. Goodwill and other intangible assets are also reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may be impaired, or in the case of finite lived intangible assets, when the carrying amount may not be recoverable. Events or circumstances that would result in an impairment review primarily include operations reporting losses or a significant change in the use of an asset. Impairment charges are recognized pursuant to FASB ASC 350-20, “Goodwill”. The Company did not record any impairments for goodwill or other intangibles during the years ended December 31, 2009 and 2008.

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     We perform our annual impairment test for goodwill with indefinite lives utilizing a discounted cash flow methodology, market comparables, and an overall market capitalization reasonableness test in computing fair value by reporting unit. We then compare the fair value of the reporting unit with its carrying value to assess if goodwill and other indefinite life intangibles have been impaired. Based on the assumptions as to growth, discount rates and the weighting used for each respective valuation methodology, results of the valuations could be significantly changed. However, we believe that the methodologies and weightings used are reasonable and result in appropriate fair values of the reporting units.

     Our measurement date for our annual impairment test is January 1 of each year. We perform interim impairment tests if trigger events or changes in circumstances indicate the carrying amount may be impaired. There were no trigger events during 2009 and as such, only an annual impairment test was performed.

Sales Recognition

     Sales are recognized when products are shipped and the title and risk of loss has passed to unaffiliated customers. Revenue related to shipping and handling costs billed-to customers are included in net sales and the related shipping and handling costs are included in cost of products sold.

Research and Development

     Research and development costs for new products are expensed as incurred and totaled $2.3 million in 2009, $2 million in 2008 and $1.7 million in 2007.

Advertising

     Advertising costs are expensed as incurred.

Foreign Currency Translation

     Asset and liability accounts are translated into U.S. dollars using exchange rates in effect at the date of the consolidated balance sheet. Revenues and expenses are translated at weighted average exchange rates in effect during the period. Transaction gains and losses arising from exchange rate changes on transactions denominated in a currency other than the functional currency are included in income and expense as incurred. The translation adjustments are recorded in accumulated other comprehensive income (loss). Upon sale or substantially complete liquidation of an investment in a foreign entity, the cumulative translation adjustment for that entity is reclassified from accumulated other comprehensive income (loss) to earnings.

Use of Estimates

     The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Derivative Financial Instruments

     The Company had no derivative instruments outstanding at December 31, 2009. The Company does not hold derivatives for trading purposes.

Reclassifications

     Certain prior year amounts have been reclassified to conform to current year presentation.

Recently Adopted Accounting Pronouncements

     In December 2008, the FASB issued an accounting standard regarding a company’s disclosures about postretirement benefit plan assets. This standard requires additional disclosures about plan assets for sponsors of defined

44

benefit pension and postretirement plans including expanded information regarding investment strategies, major categories of plan assets, and concentrations of risk within plan assets. Additionally, this standard requires disclosures similar to those required for fair value measurements and disclosures under ASC 820 with respect to the fair value of plan assets such as the inputs and valuation techniques used to measure fair value and information with respect to classification of plan assets in terms of the hierarchy of the source of information used to determine their value. The disclosures under this standard are required beginning with the annual period ended December 31, 2009. The Company’s additional disclosures are included in Note C in the Notes To Consolidated Financial Statements.

     The FASB issued a standard in June 2009 that established the FASB Accounting Standards Codification (ASC) that amended the hierarchy of U.S. generally accepted accounting principles (GAAP). The ASC became the single source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification does not change US GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. Following this statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, the FASB will issue Accounting Standards Updates (ASU). All other non-grandfathered non-SEC accounting literature not included in the Codification will become non authoritative. The Company adopted this standard effective as of September 30, 2009. The adoption did not impact the Company’s financial condition, results of operations, or cash flow, however, throughout the notes to the consolidated financial statements references that were previously made to various former authoritative U.S. GAAP pronouncements have been changed to coincide with the appropriate section of the ASC.

     In December 2007, the FASB issued a new business combinations standard codified within ASC 805, “Business Combinations” (ASC 805). ASC 805 revises the principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired in a business combination or gain from a bargain purchase. ASC 805 also revises the principles and requirements for how the acquirer determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This topic became effective for the Company as of January 1, 2009. The adoption of ASC 805 had a significant impact due to the recent acquisition of Dulmison and will impact the Company’s consolidated financial statements to the extent the Company enters into future business acquisitions.

     In December 2007, the FASB adopted ASC 810, consolidation requirements for reporting noncontrolling interests in financial statements. This standard establishes accounting and reporting for the noncontrolling interest in a subsidiary and for deconsolidation of a subsidiary. It also amends certain consolidation procedures for consistency with the requirements of ASC 805. This topic became effective on January 1, 2009 and is applied prospectively to future business combinations. The impact to the Company is the retroactive presentation and disclosure requirements for all periods presented on the Company’s consolidated financial statements of noncontrolling interests.

     On January 1, 2009, the Company adopted updated guidance included in ASC 805. This guidance amends and clarifies the initial recognition and measurement, subsequent measurement and accounting and related disclosures of assets and liabilities arising from contingencies in a business combination. The adoption of this guidance did not impact the Company’s consolidated financial statements.

     In May 2009, the FASB amended ASC Topic 855, “Subsequent Events” (ASC 855), which amended principles and requirements for subsequent events. ASC 855 details the period after the balance sheet date during which the Company should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which the Company should recognize events or transactions occurring after the balance sheet date in its financial statements and the required disclosures for such events. ASC 855 is effective for interim or annual reporting periods ending after June 15, 2009. These amendments did not have an impact on the Company’s financial condition, results of operations, or cash flows.

     In August 2009, the Financial FASB issued Accounting Standards Update (ASU) No. 2009-05, “Measuring Liabilities at Fair Value” (ASU 2009-05). This update provides amendments to ASC Topic 820-10 for the fair value

45

measurement of liabilities when a quoted price in an active market is not available. The adoption of ASU 2009-05 did not have a material effect on the Company’s financial condition, results of operations, or cash flow.

Recently Issued Accounting Pronouncements

     In June 2009, the FASB updated guidance included in FASB ASC 810-10, related to the consolidation of variable interest entities. This guidance will require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. In addition, this updated guidance amends the quantitative approach for determing the primary beneficiary of a variable interest entity. ASC 810-10 amends certain guidance for determining whether an entity is a variable interest entity and adds additional reconsideration events for determining whether an entity is a variable interest entity. Further, this guidance requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. This updated guidance is effective as of the beginning of the first annual reporting period and interim reporting periods that begin after November 15, 2009. This adoption of this guidance is not expected to have an impact on the Company’s consolidated financial statements.

     In October 2009, the FASB issued Accounting Standards Update No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements — a consensus of the FASB Emerging Issues Task Force (ASU 2009-13). ASU 2009-13 addresses the accounting for sales arrangements that include multiple products or services by revising the criteria for when deliverables may be accounted for separately rather than as a combined unit. Specifically, this guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is necessary to separately account for each product or service. This hierarchy provides more options for establishing selling price than existing guidance. ASU 2009-13 is required to be applied prospectively to new or materially modified revenue arrangements in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The Company is currently evaluating the effect the adoption of ASU 2009-13 will have on its financial position, results of operations, cash flows, and related disclosures; however no significant effect is expected.

Note B — Other Financial Statement Information

Inventories — net

	December 31
	2009			2008
Finished products	$	26,161		$	21,829
Work-in-process		3,473			2,382
Raw materials		34,788			32,231
		64,422			56,442
Excess of current cost over LIFO cost		(4,463	)		(5,122	)
Noncurrent portion of inventory		(3,923	)		(2,908	)
	$	56,036		$	48,412

     Costs for inventories of certain material are determined using the LIFO method and totaled approximately $19.5 million and $21.7 million at December 31, 2009 and 2008, respectively.

46

Property and equipment — net

     Major classes of property, plant and equipment are as follows:

	December 31
	2009		2008
Land and improvements	$	7,188	$	5,490
Buildings and improvements		51,297		47,048
Machinery and equipment		104,179		91,097
Construction in progress		6,068		2,133
		168,732		145,768
Less accumulated depreciation		100,966		89,828
	$	67,766	$	55,940

     Property and equipment are recorded at cost. Depreciation for the Company’s PLP-USA assets prior to January 1, 2009 was computed using accelerated methods over the estimated useful lives, with the exception of personal computers, which were depreciated over three years using the straight-line method. Effective January 1, 2009, the Company changed its method of computing depreciation from accelerated methods to the straight-line method for its PLP-USA assets. Based on FASB ASC 250, “Accounting Changes and Error Corrections”, the Company determined that the change in depreciation method from an accelerated method to a straight-line method is a change in accounting estimate affected by a change in accounting principle. In accordance with ASC 250, a change in accounting estimate affected by a change in accounting principle is to be applied prospectively. The change is considered preferable because the straight-line method will more accurately reflect the pattern of usage and the expected benefits of such assets and provide greater consistency with the depreciation methods used by other companies in the Company’s industry. The net book value of assets acquired prior to January 1, 2009 with useful lives remaining will be depreciated using the straight-line method prospectively. As a result of the change to the straight-line method of depreciating PLP-USA’s assets, depreciation expense decreased $.5 million, or $.10 per basic and diluted share, for the year ended December 31, 2009.

     Depreciation for the remaining assets is computed using the straight-line method over the estimated useful lives. The estimated useful lives used, when purchased new, are: land improvements, ten years; buildings, forty years; building improvements, five to forty years; and machinery and equipment, three to ten years. Appropriate reductions in estimated useful lives are made for property, plant and equipment purchased in connection with an acquisition of a business or in a used condition when purchased.

     Depreciation of property and equipment was $6.7 million in 2009, $8 million in 2008 and $6.9 million in 2007. Machinery and equipment includes $1 million of capital leases at December 31, 2009 and 2008, respectively.

Legal proceedings

     From time to time, the Company may be subject to litigation incidental to its business. The Company is not a party to any pending legal proceedings that the Company believes would, individually or in the aggregate, have a material adverse effect on its financial condition, results of operations or cash flows.

Note C — Pension Plans

     PLP-USA hourly employees of the Company who meet specific requirements as to age and service are covered by a defined benefit pension plan. The Company uses a December 31 measurement date for its plan.

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     Net periodic pension cost for PLP-USA’s pension plan consists of the following components for the years ended December 31:

	2009			2008			2007
Service cost	$	908		$	704		$	708
Interest cost		1,195			1,064			938
Expected return on plan assets		(759	)		(998	)		(938	)
Recognized net actuarial loss		562			62			105
Net periodic pension cost	$	1,906		$	832		$	813

     The following tables set forth benefit obligations, plan assets and the accrued benefit cost of PLP-USA’s pension plan at December 31:

	2009			2008
Projected benefit obligation at beginning of the year	$	20,551		$	15,952
Service cost		908			704
Interest cost		1,195			1,063
Actuarial (gain) loss		(488	)		3,241
Benefits paid		(448	)		(409	)
Projected benefit obligation at end of year	$	21,718		$	20,551
Fair value of plan assets at beginning of the year	$	9,248		$	13,165
Actual return (loss) on plan assets		2,025			(3,735	)
Employer contributions		2,215			227
Benefits paid		(448	)		(409	)
Fair value of plan assets at end of the year	$	13,040		$	9,248
Unfunded pension obligation	$	(8,678	)	$	(11,303	)

     In accordance with ASC 715-20, the Company recognizes the underfunded status of its PLP-USA pension plan as a liability. The amount recognized in accumulated other comprehensive loss related to PLP-USA’s pension plan at December 31 is comprised of the following:

	2009			2008
Balance at January 1	$	(6,225	)	$	(1,233	)
Reclassification adjustments:
Pretax amortized net actuarial loss		562			62
Tax provision		(207	)		(23	)
		355			39
Adjustment to recognize (loss) gain
on unfunded pension obligations:
Pretax gain (loss) on plan assets		1,754			(7,973	)
Tax (provision) benefit		(646	)		2,942
		1,108			(5,031	)
Balance at December 31	$	(4,762	)	$	(6,225	)

48

     The estimated net loss for the PLP-USA pension plan that will be amortized from accumulated other comprehensive income into periodic benefit cost for 2010 is $.4 million. There is no prior service cost to be amortized in the future.

     The PLP-USA pension plan had accumulated benefit obligations in excess of plan assets as follows:

	2009		2008
Accumulated benefit obligation	$	17,039	$	16,101
Fair market value of assets		13,040		9,248

     Weighted-average assumptions used to determine benefit obligations at December 31 are as follows:

	2009			2008
Discount rate		6.00	%		5.75	%
Rate of compensation increase		3.50			3.50

     Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31 are as follows:

	2009			2008			2007
Discount rate		5.75	%		6.50	%		6.00	%
Rate of compensation increase		3.50			3.50			3.50
Expected long-term return on plan assets		8.00			8.00			8.00

     The net periodic pension cost for 2009 was based on a long-term asset rate of return of 8.0%. This rate is based upon management’s estimate of future long-term rates of return on similar assets and is consistent with historical returns on such assets. Using the plan’s current mix of assets and based on the average historical returns for such mix, an expected long-term rate-of-return of 8.0% is justified.

     The fair value of the Company’s pension plan assets as of December 31, 2009, by category, are as follows:

	At December 31, 2009
			Quoted Prices in Active		Significant		Significant
	Total Assets at		Markets for Identical		Observable Inputs		Unobservable
	Fair Value		Assets (Level 1)		(Level 2)		Inputs (Level 3)
Asset Category
Cash	$	246	$	246	$	—	$	—
Equity Securities		4,747		4,747		—		—
Mutual Funds		3,185		3,185		—		—
U.S. Treasury Securities		3,646		3,646		—		—
Corporate Bonds		1,216		1,216		—		—
Total	$	13,040	$	13,040	$	—	$	—

     See Note J — Fair Value of Financial Assets and Liabilities for a discussion of the three levels in the hierarchy of fair values.

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     The Company’s pension plan weighted-average asset allocations at December 31, 2009 and 2008, by asset category, are as follows:

	Plan assets
	at December 31
	2009			2008
Asset category
Equity securities		61	%		58	%
Debt securities		37			40
Cash and equivalents		2			2
		100	%		100	%

     Management seeks to maximize the long-term total return of financial assets consistent with the fiduciary standards of ERISA. The ability to achieve these returns is dependent upon the need to accept moderate risk to achieve long-term capital appreciation.

     In recognition of the expected returns and volatility from financial assets, retirement plan assets are invested in the following ranges with the target allocation noted:

	Range			Target
Equities		30-80	%		60	%
Fixed Income		20-70	%		40	%
Cash Equivalents		0-10	%

     Investment in these markets is projected to provide performance consistent with expected long-term returns with appropriate diversification.

     The Company’s policy is to fund amounts deductible for federal income tax purposes. The Company does not expect to contribute to its pension plan in 2010.

     The benefits expected to be paid out of the plan assets in each of the next five years and the aggregate benefits expected to be paid for the subsequent five years are as follows:

	Pension
Year	Benefits
2010	$	468
2011		506
2012		565
2013		641
2014		714
2015-2019		5,060

     The Company also provides retirement benefits through various defined contribution plans including PLP-USA’s Profit Sharing Plan. Expense for these defined contribution plans was $3.7 million in 2009, $3.6 million in 2008 and $3.5 million in 2007.

     Further, the Company also provides retirement benefits through the Supplemental Profit Sharing Plan. To the extent an employee’s award under PLP-USA’s Profit Sharing Plan exceeds the maximum allowable contribution permitted under existing tax laws, the excess is accrued for (but not funded) under a non-qualified Supplemental Profit Sharing Plan. The return under this Supplemental

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Profit Sharing Plan is calculated at a weighted average of the one year Treasury Bill rate plus 1%. At December 31, 2009 and 2008, the interest rate for the Supplemental Profit Sharing Plan was 1.37% and 4.34%, respectively. Expense for the Supplemental Profit Sharing Plan was $.3 million, $.4 million for 2008 and $.2 million for 2007. The Supplemental Profit Sharing Plan unfunded status as of December 31, 2009 and 2008 was $1.7 million and $1.3 million. The Supplemental Profit Sharing Plan is noncurrent and is included in Other noncurrent liabilities.

Note D — Debt and Credit Arrangements

	December 31
	2009			2008
Short-term debt
Secured Notes
Thailand Baht denominated (Baht106,400) at 4.2% in 2009 (5.18% in 2008)	$	3,181		$	3,101
Current portion of long-term debt		1,330			494
Total short-term debt		4,511			3,595
Long-term debt
Australian dollar denominated term loans (A$2,667), at 3.31% to 5.83% (5.83% to 6.54% in 2008), due 2010, 2011 and 2013, secured by land and building		2,024			1,152
Brazilian Real denominated term loan (R $1,059k) at .7% due 2015, secured by capital equipment		609			—
Chinese Rmb denominated term loan (RMB10,000) at 6.48% due 2012, secured by letter of credit		1,463			1,467
Thailand Baht denominated capital loans (Baht1,841) at 3.75% to 4.5% due 2010 and 2011, secured by capital equipment		18			9
Australian dollar denominated capital loan (A$405) at 6.80%, due 2009, secured by capital equipment		—			33
Polish Zloty denominated loans (PLN810) at 5.07% (3.00% to 6.31% in 2008) due 2011, secured by building, capital equipment and commercial note		184			284
Polish Zloty denominated loans (PLN593) at 4.46% (6.31% in 2008) due 2011, secured by corporate guarantee		131			202
Total long-term debt		4,429			3,147
Less current portion		(1,330	)		(494	)
Total long-term debt, less current portion		3,099			2,653
Total debt	$	7,610		$	6,248

     A PLP-USA revolving credit agreement makes $20 million available to the Company at an interest rate of money market plus .875% and was extended to February 5, 2010. At December 31, 2009, the interest rate on the revolving credit agreement was .9375%. There was no debt outstanding at December 31, 2009 under the revolving credit agreement. The Company paid less than $.1 million in commitment fees on the revolving credit agreement during 2009. The revolving credit agreement contains, among other provisions, requirements for maintaining levels of working capital, net worth and profitability. At December 31, 2009, the Company was in compliance with these covenants. On February 5, 2010, the Company entered into a new revolving credit agreement of $30 million, carrying interest at LIBOR plus 1.25% with a term expiring January 2013.

     Aggregate maturities of long-term debt during the next five years are as follows: $1.3 million for 2010, $1.7 million for 2011, $1 million for 2012, $.2 million for 2013, and $.2 million thereafter.

     Interest paid was $.5 million in 2009 and 2008 and $.6 million in 2007.

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Note E — Leases

     The Company has commitments under operating leases primarily for office and manufacturing space, transportation equipment, office equipment and computer equipment. Rental expense was $1.5 million in 2009, $1.6 million in 2008 and $1.5 million in 2007. Future minimum rental commitments having non-cancelable terms exceeding one year are $2.4 million in 2010, $1.6 million in 2011, $.8 million in 2012, $.6 million in 2013, $.5 million in 2014, and an aggregate $9 million thereafter. One such lease is for the Company’s aircraft with a lease commitment through April 2012. Under the terms of the lease, the Company maintains the risk to make up a deficiency from market value attributable to damage, extraordinary wear and tear, excess air hours or exceeding maintenance overhaul schedules required by the Federal Aviation Administration. At the present time, the Company does not believe it has incurred any obligation for any contingent rent under the lease.

     The Company has commitments under capital leases for equipment and vehicles. Amounts recognized as capital lease obligations are reported in accrued expense and other liabilities and other noncurrent liabilities in the Consolidated Balance Sheets. Future minimum rental commitments for capital leases are approximately $.1 million annually in 2010 and 2011 and less than $.1 million for 2012 and 2013 and no lease commitment in 2014. The imputed interest for the capital leases is less than $.1 million. Leased property and equipment under capital leases are amortized using the straight-line method over the term of the lease. Routine maintenance, repairs, and replacements are expensed as incurred.

Note F — Income Taxes

     Income before income taxes and discontinued operations was derived from the following sources:

	2009		2008		2007
United States	$	8,498	$	8,311	$	6,627
Foreign		21,095		16,449		14,694
	$	29,593	$	24,760	$	21,321

     The components of income tax expense for the years ended December 31 are as follows:

	2009		2008		2007
Continuing operations	$	6,760	$	7,718	$	7,501
Discontinued operations		—		67		255
	$	6,760	$	7,785	$	7,756

     The components of income tax expense attributable to income from continuing operations for the years ended December 31 are as follows:

	2009			2008			2007
Current
Federal	$	1,912		$	2,473		$	2,665
Foreign		3,659			5,679			4,787
State and local		507			411			375
		6,078			8,563			7,827
Deferred
Federal		81			(380	)		(785	)
Foreign		615			(494	)		569
State and local		(14	)		29			(110	)
		682			(845	)		(326	)
	$	6,760		$	7,718		$	7,501

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     The differences between the provision for income taxes from continuing operations at the U.S. statutory rate and the tax shown in the Statements of Consolidated Income for the years ended December 31 are summarized as follows:

	2009			2008			2007
Statutory Federal Tax Rate		34	%		34	%		34	%
Federal tax at statutory rate	$	10,062		$	8,419		$	7,249
State and local taxes, net of federal benefit		325			233			185
Non-deductible expenses		461			269			99
Foreign earnings and related tax credits		394			40			77
Non-U.S. tax rate variances		(918	)		(992	)		(340	)
ASC 740 (formally FIN 48)		(607	)		(409	)		(234	)
Valuation allowance		(480	)		140			265
Tax credits		(77	)		(65	)		(137	)
Gain from acquisition of business		(2,711	)		—			—
Other, net		311			83			337
	$	6,760		$	7,718		$	7,501

     Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax basis of assets and liabilities and their carrying value for financial statement purposes. The tax effects of temporary differences that give rise to the Company’s deferred tax assets and liabilities at December 31 are as follows:

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	2009			2008
Deferred tax assets:
Accrued compensation and benefits	$	1,163		$	973
Inventory valuation reserves		1,452			1,355
Allowance for doubtful accounts		44			50
Benefit plan reserves		4,754			4,828
Foreign tax credits		2,929			4,193
Capital tax loss carryforwards		2,132			2,152
NOL carryforwards		968			547
Other accrued expenses		750			1,607
Unrecognized tax benefits		35			119
Gross deferred tax assets		14,227			15,824
Valuation allowance		(3,392	)		(4,152	)
Net deferred tax assets		10,835			11,672
Deferred tax liabilities:
Depreciation and other basis differences		(2,649	)		(2,079	)
Undistributed foreign earnings		—			(39	)
Inventory		(11	)		(31	)
Prepaid expenses		(75	)		(70	)
Intangibles		(1,663	)		(401	)
Unrealized Foreign Exchange		(230	)		—
Other		(112	)		(48	)
Deferred tax liabilities		(4,740	)		(2,668	)
Net deferred tax assets	$	6,095		$	9,004

	2009			2008
Change in net deferred tax assets:
Deferred income tax benefit	$	(682	)	$	845
Items of other comprehensive income (loss)		(853	)		2,919
Deferred tax balances from business acquisition		(1,374	)		—
Total change in net deferred tax assets	$	(2,909	)	$	3,764

     Deferred taxes are recognized at currently enacted tax rates for temporary differences between the financial reporting and income tax bases of assets and liabilities and operating loss and tax credit carryforwards.

     At December 31, 2009, the Company had $2.9 million of foreign tax credit carryforwards that will expire in years 2013 and 2014, $2.1 million of capital loss carryfowards that will expire in 2013 and $1.1 million of net operating loss carryfowards that will expire between the years 2010 and 2013. The Company has established a valuation allowance of $3.4 million at December 31, 2009 to record its gross deferred tax assets at an amount that is more likely than not to be realized. The valuation allowance was recorded for $.4 million of foreign tax credits carryfowards, $2.1 million of capital losses carryfowards and $.9 million of net operating loss carryforwards that may expire before being realized. The net decrease in the valuation allowance is primarily due to the release of foreign tax credit carryforwards that are expected to be realized and partially offset by an increase in foreign net operating loss carryforwards that are not expected to be realized. In 2008, the net increase in the valuation allowance was $2.3 million due to the valuation allowance recorded for the capital loss from the sale of SMP, a wholly owned domestic subsidiary.

     As of December 31, 2009, the Company has not established a deferred tax liability associated with its undistributed foreign earnings as such earnings are considered to be permanently reinvested. The amount of such

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earnings is approximately $82.1 million at December 31, 2009. These earnings would be taxable upon the sale or liquidation of these foreign subsidiaries, or upon the remittance of dividends. While the measurement of the unrecognized U.S. income taxes with respect to these earnings is not practicable, foreign tax credits would be available to offset some or all of any portion of such earnings that are remitted as dividends.

     Income taxes paid net of refunds were approximately $5.8 million in 2009, $7.7 million in 2008 and $8.1 million in 2007.

     The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2003.

     The changes in unrecognized tax benefits for the years ended December 31 are as follows:

	2009			2008			2007
Balance at January 1	$	1,176		$	1,585		$	1,819
Additions for tax positions of current year		164			161			224
Additions for tax positions of prior years		678			290			—
Reductions for tax positions of prior years		(79	)		(282	)		(121	)
Expiration of statutes of limitations		(635	)		(578	)		(337	)
Balance at December 31	$	1,304		$	1,176		$	1,585

     Accrued interest and penalties are not included in the above unrecognized tax balances at December 31, 2009, 2008 and 2007. The Company recognizes interest and penalties accrued related to unrecognized tax benefits as part of income tax expense. During the year ended December 31, 2009 and 2008, the Company recognized less than $(.2) million in interest, net of the amount lapsed through expiring statutes. The Company had approximately $.3 million for the payment of interest accrued at December 31, 2009 and $.2 million at December 31, 2008. Penalties of approximately $.3 have been accrued for unrecognized tax positions as of December 31, 2009. If recognized approximately $.7 million of unrecognized tax benefits would affect the tax rate. The Company may decrease its unrecognized tax benefits by approximately $.1 million within the next twelve months due to the expiration of statutes of limitations.

Note G — Share-Based Compensation

The 1999 Stock Option Plan

     The 1999 Stock Option Plan (the Plan) permits the grant of 300,000 options to buy common shares of the Company to certain employees at not less than fair market value of the shares on the date of grant. At December 31, 2009 there were 500 shares that expired under the Plan. Options issued to date under the Plan vest 50% after one year following the date of the grant, 75% after two years, and 100% after three years and expire from five to ten years from the date of grant. Shares issued as a result of stock option exercises will be funded with the issuance of new shares.

     The Company has elected to use the simplified method of calculating the expected term of the stock options and historical volatility to compute fair value under the Black-Scholes option-pricing model. The risk free rate for periods within the contractual life of the option is based on the U.S. zero coupon Treasury yield in effect at the time of grant. Forfeitures have been estimated to be zero.

     There were 8,500 options granted for the year ended December 31, 2009. There were 13,000 options granted for the year ended December 31, 2008. There were 20,000 options granted during the year ended December 31, 2007. The fair values for the stock options granted in 2009, 2008 and 2007 were estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

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	2009			2008			2007
Risk-free interest rate		5.2	%		4.2	%		4.3	%
Dividend yield		2.1	%		2.8	%		2.9	%
Expected life (years)		6			6			6
Expected volatility		44.0	%		34.4	%		37.9	%

     Activity in the Company’s plan for the year ended December 31, 2009 was as follows:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise Price		Contractual		Intrinsic
	Shares			per Share		Term (Years)		Value
Outstanding at January 1, 2009		107,092		$	27.83
Granted		8,500		$	39.10
Exercised		(30,090	)	$	15.50
Forfeited		—		$	0.00
Outstanding (vested and expected to vest) at December 31, 2009		85,502		$	33.29		5.9	$	961
Exercisable at December 31, 2009		66,752		$	30.64		5.1	$	929

     The weighted-average grant-date fair value of options granted during 2009, 2008 and 2007 was $16.07, $15.52 and $11.93, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2009, 2008, and 2007 was $.8 million, $.4 million, and $.9 million, respectively. Cash received for the exercise of stock options during 2009 and 2008 was $.4 million and $.5 million, respectively.

     For the years ended December 31, 2009, 2008 and 2007, the Company recorded compensation expense related to the stock options currently vesting, reducing income before taxes and net income by $.1 million in 2009 and $.2 million annually in 2008 and 2007. The total compensation cost related to nonvested awards not yet recognized at December 31, 2009 is expected to be a combined total of $.2 million over a weighted-average period of 2.3 years.

     The excess tax benefits from stock based awards for the year ended December 31, 2009 was $.1 million, as reported on the consolidated statements of cash flows in financing activities, and represents the reduction in income taxes otherwise payable during the period, attributable to the actual gross tax benefits in excess of the expected tax benefits for options exercised in the current period.

Long Term Incentive Plan of 2008

     Under the Preformed Line Products Company Long Term Incentive Plan of 2008 (the “LTIP Plan”), certain employees, officers, and directors will be eligible to receive awards of options and restricted shares. The purpose of this LTIP Plan is to give the Company and its subsidiaries a competitive advantage in attracting, retaining, and motivating officers, employees, and directors and to provide an incentive to those individuals to increase shareholder value through long-term incentives directly linked to the Company’s performance. The total number of Company common shares reserved for awards under the LTIP Plan is 400,000. Of the 400,000 common shares, 300,000 common shares have been reserved for restricted share awards and 100,000 common shares have been reserved for share options. The LTIP Plan expires on April 17, 2018.

Restricted Share Awards

     For all of the participants except the CEO, a portion of the restricted share award is subject to time-based cliff vesting and a portion is subject to vesting based upon the Company’s performance over a three year period. All

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of the CEO’s restricted shares are subject to vesting based upon the Company’s performance over a three year period.

     The restricted shares are offered at no cost to the employees; however, the participant must remain employed with the Company until the restrictions on the restricted shares lapse. The fair value of restricted share award is based on the market price of a common share on the grant date. The Company currently estimates that no awards will be forfeited. For time-based restricted shares the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the award in General and administrative expense in the accompanying statement of consolidated income. Dividends declared in 2009 and thereafter will be accrued in cash dividends. In 2008 dividends were reinvested in additional restricted shares, and held subject to the same vesting requirements as the underlying restricted shares.

     A summary of the restricted share awards for the year ended December 31, 2009 is as follows:

	Restricted Share Awards
	Performance				Total		Weighted-Average
	and Service		Service		Restricted		Grant-Date
	Required		Required		Awards		Fair Value
Nonvested as of January 1, 2009		39,364		4,273		43,637	$	54.74
Granted		75,982		8,202		84,184		29.75
Vested		—		—		—		—
Forfeited		—		—		—		—
Nonvested as of December 31, 2009		115,346		12,475		127,821	$	38.28

     For time-based restricted shares the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the award in General and administrative expense in the accompanying statement of consolidated income. Compensation expense related to the time-based restricted shares for the years ended December 31, 2009 and 2008 was $.2 million and less than $.1 million, respectively. As of December 31, 2009, there was $.3 million of total unrecognized compensation cost related to time-based restricted share awards that is expected to be recognized over the weighted-average remaining period of approximately 2 years.

     For the performance-based awards, the number of restricted shares in which the participants will vest depends on the Company’s level of performance measured by growth in pretax income and sales growth over a requisite performance period. Depending on the extent to which the performance criterions are satisfied under the LTIP Plan, the participants are eligible to earn common shares over the vesting period. Performance-based compensation expense for the year ended December 31, 2009 and 2008 was $1.6 million and $.3 million. As of December 31, 2009, the remaining performance-based restricted share awards compensation expense of $2.5 million is expected to be recognized over a period of approximately 1.25 years.

     In the event of a Change in Control, vesting of the restricted shares will be accelerated and all restrictions will lapse. Unvested performance-based awards are based on a maximum potential payout. Actual shares awarded at the end of the performance period may be less than the maximum potential payout level depending on achievement of performance-based award objectives.

     To satisfy the vesting of its restricted share awards, the Company has reserved new shares from its authorized but unissued shares. Any additional granted awards will also be issued from the Company’s authorized but unissued shares. Under the LTIP Plan there are 172,179 common shares currently available for additional restricted share grants.

Share Option Awards

     The LTIP plan permits the grant of 100,000 share options to buy common shares of the Company to certain employees at not less than fair market value of the shares on the date of grant. At December 31, 2009 there were 89,000 shares remaining available for the issuance under the LTIP Plan. Options issued to date under the Plan vest 50% after one year following the date of the grant, 75% after two years, and 100% after three years and expire from

57

five to ten years from the date of grant. Shares issued as a result of stock option exercises will be funded with the issuance of new shares.

     The Company has elected to use the simplified method of calculating the expected term of the stock options and historical volatility to compute fair value under the Black-Scholes option-pricing model. The risk free rate for periods within the contractual life of the option is based on the U.S. zero coupon Treasury yield in effect at the time of grant. Forfeitures have been estimated to be zero.

     There were 11,000 options granted for the year ended December 31, 2009. There were no options granted for the year ended December 31, 2008. The fair values for the stock options granted in 2009 were estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2009
Risk-free interest rate		5.2	%
Dividend yield		2.1	%
Expected life (years)		6
Expected volatility		44.0	%

     Activity in the Company’s plan for the year ended December 31, 2009 was as follows:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise Price		Contractual		Intrinsic
	Shares		per Share		Term (Years)		Value
Outstanding at January 1, 2009		—	$	0.00
Granted		11,000	$	38.76
Exercised		—	$	0.00
Forfeited		—	$	0.00
Outstanding (vested and expected to vest) at December 31, 2009		11,000	$	38.76		9.8	$	55
Exercisable at December 31, 2009		—		—		—		—

     The weighted-average grant-date fair value of options granted during 2009 was $15.93. There were no stock options exercised under the LTIP Plan during the year ended December 31, 2009. There were no excess tax benefits from stock based awards for the year ended December 31, 2009.

     For the year ended December 31, 2009, the Company recorded compensation expense related to the stock options currently vesting, reducing income before taxes and net income by less than $.1 million in 2009. The total compensation cost related to nonvested awards not yet recognized at December 31, 2009 is expected to be a combined total of $.2 million over a weighted-average period of approximately 3 years.

Note H — Computation of Earnings Per Share

     Basic earnings per share were computed by dividing net income by the weighted-average number of shares of common stock outstanding for each respective period. Diluted earnings per share were calculated by dividing net income by the weighted-average of all potentially dilutive shares of common stock that were outstanding during the periods presented.

     The calculation of basic and diluted earnings per share for the years ended December 31 were as follows:

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	2009		2008		2007
Numerator
Amount attributable to PLPC shareholders
Income from continuing operations	$	23,357	$	16,754	$	13,766
Income from discontinued operations		—		869		393
Net income attributable to PLPC	$	23,357	$	17,623	$	14,159
Denominator
Determination of shares
Weighted-average common shares outstanding		5,232		5,279		5,372
Dilutive effect — share-based awards		134		60		44
Diluted weighted-average common shares outstanding		5,366		5,339		5,416
Earnings per common share attributable to PLPC shareholders
Basic
Income from continuing operations	$	4.46	$	3.17	$	2.57
Income from discontinued operations	$	—	$	0.17	$	0.07
Net income attributable to PLPC	$	4.46	$	3.34	$	2.64
Diluted
Income from continuing operations	$	4.35	$	3.14	$	2.54
Income from discontinued operations	$	—	$	0.16	$	0.07
Net income attributable to PLPC	$	4.35	$	3.30	$	2.61

     For the years ended December 31, 2009, 2008 and 2007, 32,500, 13,000 and zero stock options were excluded from the calculation of diluted earnings per share due to the average market price being lower than the exercise price plus any unearned compensation on unvested options, and as such they are anti-dilutive.

Note I — Goodwill and Other Intangibles

     The Company’s finite and indefinite-lived intangible assets consist of the following:

	December 31, 2009					December 31, 2008
	Gross Carrying		Accumulated			Gross Carrying		Accumulated
	Amount		Amortization			Amount		Amortization
Finite-lived intangible assets
Patents	$	4,827	$	(3,213	)	$	4,807	$	(2,901	)
Land use rights		1,365		(55	)		1,350		(32	)
Trademark		311		—			—		—
Customer relationships		5,372		(520	)		1,003		(369	)
	$	11,875	$	(3,788	)	$	7,160	$	(3,302	)
Indefinite-lived intangible assets
Goodwill	$	6,925				$	5,520

     The Company performs its annual impairment test for goodwill pursuant to ASC 350-20 as of January 1 of each year. The additions of tradename and customer relationships were related to the acquisition of Dulmison (see Note M — Business Combinations for further details). The aggregate amortization expense for other intangibles with finite lives, ranging from 7 to 82 years, was $.5 million for the year ended December 31, 2009, $.6 million for the year ended December 31, 2008 and $.5 million for the year ended December 31, 2007. Amortization expense is

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estimated to be $.9 million for 2010 and $.7 million annually for 2011, 2012, 2013 and 2014.

     The Company’s only intangible asset with an indefinite life is goodwill. The increase in goodwill in 2009 is related to the acquisition of Direct Power and Water Corporation (DPW) of $.9 million and foreign currency translation. The $2.3 million increase to goodwill in 2008 is related to the acquisition of DPW in the amount of $.5 million, the joint venture formed between the Company’s Australian subsidiary and BlueSky Energy Pty Ltd in the amount of $.5 million and $1.4 million related to the acquisition of Belos (see Note M — Business Combinations for further details).

     The changes in the carrying amount of goodwill by segment for the years ended December 31, 2009 and 2008, is as follows:

	Australia			South Africa			Poland			All Other			Total
Balance at January 1, 2008	$	1,782		$	57		$	—		$	2,089		$	3,928
Additions		462			—			1,370			489			2,321
Curency translation		(509	)		(16	)		(230	)		26			(729	)
Balance at December 31, 2008		1,735			41			1,140			2,604			5,520
Additions		—			—			—			866			866
Curency translation		508			11			21			(1	)		539
Balance at December 31, 2009	$	2,243		$	52		$	1,161		$	3,469		$	6,925

Note J — Fair Value of Financial Assets and Liabilities

     Effective January 1, 2008, the Company adopted ASC 820-10, “Fair Value Measurements and Disclosures”, formerly Financial Accounting Standards (SFAS) No. 157. ASC 820-10 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820-10 does not require new fair value measurements. ASC 820-10 was effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal periods. This topic enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. This topic requires that assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities;

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data; or

Level 3: Unobservable inputs that are not corroborated by market data.

     In April 2009, the FASB issued certain amendments as codified in ASC 820-10-65, “Fair Value Disclosure.” ASC 820-10-65 provides additional guidance in accordance with ASC 820-10, when the volume and level of activity for the asset or liability has significantly decreased. ASC 820-10-65 was effective for interim and annual reporting periods ending after June 15, 2009. The adoption of ASC 820-10-65 did not have an impact on the Company’s consolidated financial statements.

     In April 2009, the FASB issued ASC 825-10-50 which requires interim disclosures regarding the fair values of financial instruments that are within the scope of ASC 825 to require disclosures about the fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. Additionally, ASC 825-10-50 requires disclosure of the methods and significant assumptions used to estimate fair value of financial instruments on an interim basis as well as changes of the methods and significant assumptions from prior periods. The adoption of ASC 825-10-50 did not have a material impact on the Company’s consolidated financial statements.

     The carrying value of the Company’s current financial instruments, which include cash and cash

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equivalents, accounts receivable, accounts payable, notes payable, and short-term debt, approximates its fair value because of the short-term maturity of these instruments. At December 31, 2009 and 2008, the fair value of the Company’s long-term debt was estimated using discounted cash flows analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements which are considered to be level two inputs. Based on the analysis performed, the fair value and the carrying value of the Company’s long-term debt are as follows:

	December 31, 2009				December 31, 2008
	Fair Value		Carrying Value		Fair Value		Carrying Value
Long-term debt and related current maturities	$	4,617	$	4,429	$	3,294	$	3,147

Note K — Segment Information

     The Company designs, manufactures and sells hardware employed in the construction and maintenance of telecommunication, energy and other utility networks, data communication products and mounting hardware for solar power applications. Principal products include cable anchoring, control hardware and splice enclosures which are sold primarily to customers in North and South America, Europe, South Africa and Asia Pacific.

     The Company has seven reportable segments. The segments have been determined based on results of operations as reported by location. The reportable segments are PLP-USA, Australia, Brazil, South Africa, Canada, Poland and All Other. The PLP-USA segment is comprised of the U.S. operations supporting primarily the Company’s domestic energy and telecommunications products. The Australia segment is comprised of the Company’s operation in Australia supporting the Company’s energy, telecommunications, data communication and solar products. The Brazil and Canada segments are comprised of the manufacturing and sales operations from those locations. Our final two segments are South Africa and Poland, which are comprised of manufacturing and sales operations from those locations and have been included as segments to comply with reporting segments for 75% of consolidated sales. The Thailand, Malaysia and Indonesia locations acquired in the Dulmison acquisition (see Note M for further details) are included in our All Other reportable segment. Our remaining operations, Mexico, Great Britain, Spain, China, Asia and DPW are included in the All Other segment as none of these operations meet the criteria for a reportable segment and individually represent less than 10% of each of the Company’s combined net sales, consolidated net income, and consolidated assets.

     The accounting policies of the operating segments are the same as those described in Note A in the Notes To Consolidated Financial Statements. The Company evaluates performance based on net income. No single customer accounts for more than ten percent of the Company’s consolidated revenues. It is not practical to present revenues by product line. U.S. net sales for the years ended December 31, 2009, 2008 and, 2007 were $117.9 million, $123.8 million and $110 million, respectively. U.S. long lived assets as of December 31, 2009 and 2008 were $23.6 million and $23.1 million, respectively.

     The following table presents a summary of the Company’s reportable segments for the years ended December 31, 2009, 2008 and 2007. Financial results for the PLP-USA segment include the elimination of all segments’ intercompany profits in inventory.

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	Year ended December 31
	2009			2008			2007
Net sales
PLP-USA	$	103,910		$	111,721		$	103,173
Australia		27,923			27,244			29,855
Brazil		30,744			30,279			26,236
South Africa		10,264			9,535			8,049
Canada		12,237			9,952			10,620
Poland		11,148			20,602			5,202
All Other		60,980			60,409			50,154
Total net sales	$	257,206		$	269,742		$	233,289
Intersegment sales
PLP-USA	$	6,215		$	7,668		$	5,424
Australia		62			62			137
Brazil		2,314			1,828			1,977
South Africa		786			854			888
Canada		232			421			117
Poland		1,082			411			34
All Other		11,025			10,644			9,849
Total intersegment sales	$	21,716		$	21,888		$	18,426
Interest income
PLP-USA	$	15		$	115		$	551
Australia		31			109			21
Brazil		73			79			106
South Africa		110			129			91
Canada		15			101			95
Poland		41			17			13
All Other		95			296			211
Total interest income	$	380		$	846		$	1,088
Interest expense
PLP-USA	$	(31	)	$	(39	)	$	(38	)
Australia		(85	)		(159	)		(234	)
Brazil		(93	)		(28	)		(21	)
South Africa		(15	)		(1	)		—
Canada		—			—			—
Poland		(27	)		(70	)		(25	)
All Other		(272	)		(247	)		(277	)
Total interest expense	$	(523	)	$	(544	)	$	(595	)

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	Year ended December 31
	2009			2008		2007
Income taxes
PLP-USA	$	1,842		$	2,577	$	2,268
Australia		379			258		825
Brazil		1,209			862		1,112
South Africa		663			777		542
Canada		887			747		991
Poland		206			554		(31	)
All Other		1,574			1,943		1,794
Total income taxes	$	6,760		$	7,718	$	7,501
Income from continuing operations, net of tax
PLP-USA	$	4,352		$	4,877	$	4,018
Australia		6,212			426		1,736
Brazil		2,209			1,336		2,286
South Africa		1,296			1,980		1,185
Canada		2,038			1,537		1,811
Poland		772			2,089		(7	)
All Other		5,954			4,797		2,791
Total income from continuing operations, net of tax		22,833			17,042		13,820
Income from discontinued operations, net of tax		—			869		393
Net income		22,833			17,911		14,213
Income (loss) attributable to noncontrolling interest, net of tax		(524	)		288		54
Net income attributable to PLPC	$	23,357		$	17,623	$	14,159

	As of December 31
	2009		2008		2007
Expenditure for long-lived assets
PLP-USA	$	2,854	$	3,472	$	4,589
Australia		783		267		693
Brazil		2,357		1,672		470
South Africa		347		389		141
Canada		227		137		74
Poland		849		833		649
All Other		3,250		3,241		2,615
Total expenditures for long-lived assets	$	10,667	$	10,011	$	9,231
Depreciation and amortization
PLP-USA	$	3,224	$	4,399	$	4,558
Australia		741		772		749
Brazil		696		638		169
South Africa		143		111		117
Canada		127		89		93
Poland		672		972		286
All Other		1,646		1,568		1,442
Total depreciation and amortization	$	7,249	$	8,549	$	7,414

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	As of December 31
	2009		2008
Identifiable assets
PLP-USA	$	65,266	$	72,641
Australia		31,269		19,438
Brazil		25,194		16,087
South Africa		7,081		5,569
Canada		9,006		8,545
Poland		14,777		13,920
All Other		82,330		54,675
		234,923		190,875
Corporate assets		449		—
Total identifiable assets	$	235,372	$	190,875
PLP-USA	$	22,723	$	22,465
Australia		9,796		7,332
Brazil		6,004		3,355
South Africa		1,102		637
Canada		2,003		1,627
Poland		5,524		5,372
All Other		20,614		15,152
Total long-lived assets	$	67,766	$	55,940

Note L -Related Party Transactions

     The Company’s DPW operation rents two properties owned by RandReau Properties, LLC and RaRe Properties, LLC., which are owned by Kevin Goodreau, Vice President of Business Development — Solar Division, and Jeffrey Randall, Vice President of Product Design — Solar Division. For the year ended December 31, 2009 and 2008 DPW paid rent expense of $.2 million annually for the properties.

     The Company’s Belos operation hires temporary employees through a temporary work agency, Flex-Work Sp. Z o.o., which is 50% owned by Agnieszka Rozwadowska. Agnieszka Rozwadowska is the wife of Piotr Rozwadowski, the Managing Director of the Belos operation located in Poland. For the years ended December 31, 2009 and 2008, Belos incurred a total of $.4 million and $1.1 million, respectively, for such temporary labor expense.

     In September 2009, the Company invested $.5 million in Proxisafe, a Canadian company formed to design and commercialize new industrial safety equipment. In light of this investment, Mr. Robert Ruhlman, the Chairman of the Board, President and CEO of the Company, was asked to become a board member.

     The Company was a sponsor of Ruhlman Motorsports. Ruhlman Motorsports is owned by Randall M. Ruhlman, a director of the Company, and by his wife. No sponsorship fees were paid during 2009 or 2008. In 2007 the Company paid annual sponsorship fees of $950,000 to Ruhlman Motorsports.

     On May 15, 2008, the Company purchased 152,726 Common Shares of the Company from the John Deaver Drinko Trust, (the “Drinko Trust”) and from the Elizabeth Gibson Drinko IRA (the “Drinko IRA”), at a price per share of $42.24. The purchase price was calculated using the average closing price of the Company’s Common Shares on the NASDAQ over the prior thirty calendar days less 15%. John D. Drinko was a director of the Company from 1954 until his death in January 2008. Elizabeth Drinko is the wife of John D. Drinko. The agreements were executed on behalf of the Drinko Trust and Drinko IRA by Elizabeth Drinko, as beneficiary of the Drinko IRA and as Trustee of the Drinko Trust and individually and by National City Bank, as Trustee of the Drinko IRA. The purchase was made pursuant to the previously disclosed February 2007 authorization by the Company’s Board of Directors for repurchase of up to 200,000 common shares.

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Note M -Business Combinations

     The Company accounts for acquisitions in accordance with ASC 805, which includes provisions that were adopted effective January 1, 2009. The new provisions significantly changed the accounting for business combinations both during the period of the acquisition and in subsequent periods. The new provisions are applied prospectively to business combinations after January 1, 2009. As a result of the provisions, transaction costs associated with a business combination entered into by the Company were expensed, and a gain on acquisition of business was recorded, as discussed below.

     On December 18, 2009, the Company completed the business combination acquiring certain subsidiaries and other assets from Tyco Electronics Group S.A. (Tyco Electronics) of its Dulmison business for $16 million in cash, and the assumption of certain liabilities.

     Dulmison was a supplier and manufacturer of electrical transmission and distribution products. Dulmison designs, manufacturers and markets pole line hardware and vibration control products for the global electrical utility industry. Dulmison was based in Australia with operations in Australia, Thailand, Indonesia, Malaysia, Mexico, and the United States. The acquisition of Dulmison will strengthen the Company’s position in the power distribution and transmission hardware market and will expand the Company’s presence in the Asia-Pacific region.

     The operations located in Thailand will report under the PLP’s existing Asia operations included in the All Other reportable segment. The operations located in Indonesia and Malaysia will be reported as part of All Other segment. The assets acquired in Australia, Mexico and the United States will be included in each of the Company’s corresponding operating locations.

     The acquisition has resulted in a gain on acquisition of business under the guidance for business combinations. The purchase price was allocated to the acquired assets and assumed liabilities based on the fair values at the date of acquisition, with the gain on the acquisition of $9.1 million representing the excess of the fair value allocated to the net assets over the purchase price. The following table summarizes the fair values of the assets acquired and liabilities assumed on December 18, 2009 related to the Dulmison acquisition:

	December 18, 2009
Cash and cash equivalents	$	4,144
Accounts receivable		6,274
Inventories		9,752
Other current assets		762
Deferred income taxes		141
Total current assets		21,073
Other assets		1,155
Deferred income taxes		213
Property and equipment		3,471
Tradename		311
Customer relationships		4,365
Total assets		30,588
Current deferred tax liabilities		306
Other current liabilities		2,289
Noncurrent deferred tax liabilities		1,422
Other noncurrent liabilities		1,484
Total liabilities		5,501
Net tangible and intangible assets		25,087
Purchase Price		16,000
Gain on bargain purchase	$	9,087

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     The Company was able to realize a gain on acquisition of business as a result of current market conditions and the seller’s desire to exit the business. The gain on acquisition of business is recorded on the face of the Statement of Consolidated Income within other income (expense).

     The useful life of the acquired trade name of $.3 million is four years. The useful life of the customer relationships is 15 to 20 years. The aggregate amortization expense for these intangible assets in 2009 was zero.

     Operating results of the acquired business have been included in the Company’s statement of consolidated income from the acquisition date forward. From the acquisition date through December 31, 2009, operating results were di minimus.

     Acquisition related costs were $1.5 million for the year ended December 31, 2009. These costs were for legal, accounting, valuation, other professional services, and travel related costs. These costs were included in general and administrative costs in the Company’s statement of consolidated income. In addition to the acquisition related costs, the Company has accrued and expensed $2 million related to termination benefits for certain Dulmison employees. These additional costs were incorporated as part of the Stock and Asset Purchase Agreement (the “Purchase Agreement”) and were required in order to complete the acquisition of the Dulmison Operations. Through the acquisition of Dulmison, 344 employees have been added to the Company’s existing worldwide workforce.

     On October 7, 2009, the Company acquired a 33.3% investment in Proxisafe Ltd. for $.5 million. The Canadian company was formed to design and commercialize new industrial safety equipment. The Company’s consolidated balance sheet as of December 31, 2009 reflects the investment under the equity method.

     On May 21, 2008, the Company entered into a Joint Venture Agreement for $.3 million, as goodwill, to form a joint venture between the Company’s Australian subsidiary, Preformed Line Products Australia Pty Ltd (PLP-AU) and BlueSky Energy Pty Ltd, a solar systems integration and installation business based in Sydney, Australia. PLP-AU holds a 50% ownership interest in the new joint venture company, which will operate under the name BlueSky Energy Australia (BlueSky), with the option to acquire the remaining 50% ownership interest from BlueSky Energy Pty Ltd over the next five years. BlueSky Energy Pty Ltd has transferred technology and assets to the joint venture. The Company’s consolidated balance sheet as of December 31, 2009 reflects the acquisition of the joint venture under the purchase method of accounting and due to the immateriality of the joint venture on the results of operations no additional disclosures are included. The allocation of the purchase price has been finalized.

Note N — Discontinued Operations

     On May 30, 2008, the Company sold its SMP subsidiary for $11.7 million and recognized a $.8 million gain, net of tax, which includes expenses incurred related to the divestiture of SMP. The sale includes $1.5 million to be held in escrow for one year, which was received in 2009. The Company does not have any significant involvement in the operations of SMP.

     Operating results of SMP are presented in the Company’s consolidated statements of income as discontinued operations, net of tax. The operation had been reported within the SMP reporting segment, which is comprised of the U.S. operations supporting the Company’s data communication products. The operating results of the business unit for the years ended December 31, 2008 and 2007 are as follows:

	2008			2007
Net Sales	$	8,308		$	21,318
Income before income taxes		180			648
Provision for income taxes		(67	)		(255	)
Gain on sale, net of tax		756			—
Income from discontinued operations, net of tax	$	869		$	393

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Note O — Quarterly Financial Information (unaudited)

     The following table summarizes our quarterly results of operations for each of the quarters in 2009 and 2008. The fourth quarter 2009 results have been impacted by a gain on the acquisition of a business of $9.1 million or $1.73 per share basic and $1.69 per diluted share. Additionally, the fourth quarter of 2009 has been impacted by acquisition related after tax expenses of $3.2 million, or $.61 per basic and diluted share, which has been recorded in general and administrative expenses on the Statements of Consolidated Income. These quarterly results are unaudited, but in the opinion of management have been prepared on the same basis as our audited financial information and include all adjustments necessary for a fair presentation of our results of operations.

	Quarter ended
	March 31		June 30		September 30			December 31
2009
Net sales	$	58,694	$	59,568	$	69,132		$	69,812
Gross profit		18,578		19,850		24,614			21,726
Income before income taxes and discontinued operations		4,307		5,263		8,449			11,574
Income from continuing operations, net of tax		2,717		3,542		6,259			10,315
Income (loss) from discontinued operations, net of tax		—		—		—			—
Net income		2,717		3,542		6,259			10,315
Net income attributable to PLPC		2,722		3,584		6,320			10,731
Income from continuing operations per share, basic		0.52		0.69		1.21			2.05
Net income attributable to PLPC per share, basic		0.52		0.69		1.21			2.05
Income from continuing operations per share, diluted		0.51		0.68		1.19			1.99
Net income attributable to PLPC per share, diluted		0.51		0.68		1.19			1.99
2008
Net sales	$	59,865	$	75,362	$	73,952		$	60,563
Gross profit		19,005		23,677		25,463			19,122
Income before income taxes and discontinued operations		4,249		7,329		9,421			3,761
Income from continuing operations, net of tax		2,834		4,947		6,614			2,647
Income (loss) from discontinued operations, net of tax		149		620		(34	)		134
Net income		2,983		5,567		6,580			2,781
Net income attributable to PLPC		2,950		5,489		6,423			2,761
Income from continuing operations per share, basic		0.52		0.92		1.24			0.50
Net income attributable to PLPC per share, basic		0.55		1.04		1.23			0.53
Income from continuing operations per share, diluted		0.52		0.91		1.23			0.50
Net income attributable to PLPC per share, diluted		0.54		1.03		1.22			0.52

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

     None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

     The Company’s Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures as defined in Rule  13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended, were effective as of December 31, 2009.

Management’s Report on Internal Control Over Financial Reporting

     The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of the consolidated financial statements in accordance with generally accepted accounting principles.

67

     As discussed in Note M in the Notes to Consolidated Financial Statements, we acquired 100% of the Dulmison business from Tyco Electronics during 2009. As permitted by the Securities and Exchange Commission, management has excluded internal controls from this operation in its assessment. Dulmison’s net sales, net income and total assets represent 0%, 3% and 8% of consolidated net sales, net income and total assets respectively for the year ended and as of December 31, 2009.

     Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation.

     Management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer and Vice President of Finance, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. Based upon this assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2009.

     The effectiveness of the Company’s internal control over financial reporting as of December 31, 2009 has been audited by Ernst & Young LLP, an independent registered public accounting firm, who expressed an unqualified opinion as stated in their report, a copy of which is included below.

Changes in Internal Control Over Financial Reporting

     There have not been any changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f)) during the quarter ended December 31, 2009 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
of Preformed Line Products Company

We have audited Preformed Line Products Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Preformed Line Products Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable

68

assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Dulmison. Dulmison, acquired on December 18, 2009, is included in the December 31, 2009 consolidated financial statements of Preformed Line Products Company and constituted 8% of total assets as of December 31, 2009 and 0% and 3% of revenues and net income, respectively, for the year then ended. Our audit of internal control over financial reporting of Preformed Line Products Company also did not include an evaluation of the internal control over financial reporting of Dulmison.

In our opinion, Preformed Line Products Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Preformed Line Products Company as of December 31, 2009 and 2008 and the related statements of consolidated income, cash flows and shareholders’ equity for the years then ended and our report dated March 15, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Cleveland, Ohio
March 15, 2010

Item 9B. Other Information

     None

Part III

Item 10. Directors, Executive Officers and Corporate Governance

     The information required by this Item 10 is incorporated by reference to the information under the captions “Election of Directors” and “Section 16(a) Beneficial Ownership Compliance” in the Company’s Proxy Statement, for the Annual Meeting of Shareholders to be held April 26, 2010 (the “Proxy Statement”). Information relative to executive officers of the Company is contained in Part I of this Annual Report of Form 10-K. The Company has adopted a code of conduct. A copy of the code of conduct can be obtained from the Company’s Internet site at http://www.preformed.com in its About Us section.

Item 11. Executive Compensation

     The information set forth under the caption “Director and Executive Officer Compensation” in the Proxy Statement is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

     Other than the information required by Item 201(d) of Regulation S-K the information set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement is incorporated herein by reference. The information required by Item 201(d) of Regulation S-K is set forth in Item 5 of this report.

69

Item 13. Certain Relationships , Related Transactions and Director Independence

     The information set forth under the captions “Transactions with Related Persons” and “Election of Directors” in the Proxy Statement is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services

     The information set forth under the captions “Independent Public Accountants”, “Audit Fees”, “Audit-Related Fees”, “Tax Fees” and “All Other Fees” in the Proxy Statement is incorporated herein by reference.

Part IV

Item 15. Exhibits and Financial Statement Schedules

(a) Financial Statements and Schedule

Page	Financial Statements
37	Consolidated Balance Sheets
38	Statements of Consolidated Income
39	Statements of Consolidated Cash Flows
40	Statements of Consolidated Shareholders’ Equity
41	Notes to Consolidated Financial Statements

Page	Schedule
72	II — Valuation and Qualifying Accounts

(b) Exhibits

Exhibit
Number	Exhibit

2.1	Stock and Purchase Agreement, dated October 22, 2009, by and among the Company and Tyco Electronics Group S.A. to acquire the Dulmison business (The agreement does not include the schedules and other attachments. A copy will be provided to the SEC upon request.), filed herewith.
3.1	Amended and Restated Articles of Incorporation (incorporated by reference to the Company’s Registration Statement on Form 10).
3.2	Amended and Restated Code of Regulations of Preformed Line Products Company (incorporated by reference to the Company’s Registration Statement on Form 10).

4 Description of Specimen Share Certificate (incorporated by reference to the Company’s Registration Statement on Form 10).

10.1 Preformed Line Products Company 1999 Employee Stock Option Plan (incorporated by reference to the Company’s Registration Statement on Form 10).*

10.2 Preformed Line Products Company Officers Bonus Plan (incorporated by reference to the Company’s 10-K filed for the year ended December 31, 2007).*

10.3 Preformed Line Products Company Executive Life Insurance Plan — Summary (incorporated by reference to the Company’s Registration Statement on Form 10).*

10.4 Preformed Line Products Company Supplemental Profit Sharing Plan (incorporated by reference to the Company’s Registration Statement on Form 10).*

70

Exhibit
Number	Exhibit

10.5 Revolving Credit Agreement between National City Bank and Preformed Line Products Company, dated December 30, 1994 (incorporated by reference to the Company’s Registration Statement on Form 10).

10.6 Amendment to the Revolving Credit Agreement between National City Bank and Preformed Line Products Company, dated October 31, 2002 (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2003).

10.7 Preformed Line Products Company 1999 Employee Stock Option Plan Incentive Stock Option agreement (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2004).*

10.8 Stock Purchase Agreement, dated March 22, 2007, by and among the Company and Claudia W. Goodreau, Kevin M. Goodreau, Dora Ely Randall and Jeffrey J. Randall to acquire Direct Power and Water Corporation (incorporated by reference to the Company’s 10-Q filing for the quarter ended March 31, 2007).

10.9 Conditional Share Purchase Agreement, dated April 22, 2007, by and among the Company and BBO Spolka z o.o. to acquire a holding in Zaklady Wytworcze Sprzetu Sieciowego “Belos” SA (incorporated by reference to the Company’s 10-Q filing for the three-month and six-month ended June 30, 2007).

10.10 Preformed Line Products Company Chief Executive Officer Bonus Plan (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2007).*

10.11 Preformed Line Products Company Long Term Incentive Plan of 2008 (incorporated by reference to the Company’s 8-K current report filing dated May 1, 2008).*

10.12 Deferred Shares Plan (incorporated by reference to the Company’s 8-K current report filing dated August 21, 2008).

10.13 Form of Restricted Shares Grant Agreement (incorporated by reference to the Company’s 10-Q filing for the quarter ended September 30, 2008).*

10.14 Agreement and Plan of Merger, dated May 30, 2008, by and among the Company and Optical Cable Corporation to divest Superior Modular Company Inc. (incorporated by reference to the Company’s 8-K current report filing dated May 30, 2008).

14.1 Preformed Line Products Company Code of Conduct (incorporated by reference to the Company’s 8-K current report filing dated August 6, 2007).

21 Subsidiaries of Preformed Line Products Company, filed herewith.

23.1 Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm, filed herewith.

23.2 Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm, filed herewith.

31.1 Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2 Certification of the Principal Financial Officer, Eric R. Graef, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1 Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

32.2 Certification of the Principal Accounting Officer, Eric R. Graef, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

* Indicates management contracts or compensatory plan or arrangement.

71

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

	Preformed Line Products Company
March 15, 2010	/s/ Robert G. Ruhlman
	Robert G. Ruhlman
	Chairman, President and Chief Executive Officer (principal executive officer)
March 15, 2010	/s/ Eric R. Graef
	Eric R. Graef
	Chief Financial Officer and Vice President Finance (principal financial officer)

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacity and on the dates indicated.

March 15, 2010	/s/ Robert G. Ruhlman
	Robert G. Ruhlman
	Chairman, President and Chief Executive Officer
March 15, 2010	/s/ Barbara P. Ruhlman
	Barbara P. Ruhlman
	Director
March 15, 2010	/s/ Randall M. Ruhlman
	Randall M. Ruhlman
	Director
March 15, 2010	/s/ Glenn E. Corlett
	Glenn E. Corlett
	Director
March 15, 2010	/s/ Michael E. Gibbons
	Michael E. Gibbons
	Director
March 15, 2010	/s/ R. Steven Kestner
	R. Steven Kestner
	Director
March 15, 2010	/s/ Richard R. Gascoigne
	Richard R. Gascoigne
	Director

72

PREFORMED LINE PRODUCTS COMPANY

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 2009, 2008 and 2007
(Thousands of dollars)

			Additions
	Balance at		charged to					Other additions		Balance at
	beginning		costs and					or deductions		end of
For the year ended December 31, 2009:	of period		expenses		Deductions			(a)		period
Allowance for doubtful accounts	$	498	$	322	$	(224	)	$	173	$	769
Reserve for credit memos		474		224		(472	)		—		226
Slow-moving and obsolete inventory reserves		3,056		2,029		(841	)		1,295		5,539
Accrued product warranty		129		81		(6	)		5		209

			Additions
	Balance at		charged to								Balance at
	beginning		costs and					Other additions			end of
For the year ended December 31, 2008:	of period		expenses		Deductions			deductions			period
Allowance for doubtful accounts	$	733	$	114	$	(305	)	$	(44	)	$	498
Reserve for credit memos		466		472		(464	)		—			474
Slow-moving and obsolete inventory reserves		3,332		1,161		(1,322	)		(115	)		3,056
Accrued product warranty		104		147		(94	)		(28	)		129

			Additions
	Balance at		charged to					Other additions		Balance at
	beginning		costs and					or deductions		end of
For the year ended December 31, 2007:	of period		expenses		Deductions			(a)		period
Allowance for doubtful accounts	$	625	$	143	$	(172	)	$	137	$	733
Reserve for credit memos		447		795		(776	)		—		466
Slow-moving and obsolete inventory reserves		3,843		22		(1,047	)		514		3,332
Accrued product warranty		82		41		(124	)		105		104

(a) Other additions or deductions relate to translation adjustments. Included in 2009 are opening balances for acquisitions for the following reserves; allowance for doubtful accounts of $117 thousand and $1.3 million for inventory reserves. Included in 2007 are opening balances for acquisitions for the following reserves; allowance for doubtful accounts of $86 thousand, inventory reserves of $440 thousand and $97 thousand for accrued product warranty.

73

Exhibit Index

2.1 Stock and Purchase Agreement, dated October 22, 2009, by and among the Company and Tyco Electronics Group S.A. to acquire the Dulmison business (The agreement does not include the schedules and other attachments. A copy will be provided to the SEC upon request.), filed herewith.

3.1 Amended and Restated Articles of Incorporation (incorporated by reference to the Company’s Registration Statement on Form 10).

3.2 Amended and Restated Code of Regulations of Preformed Line Products Company (incorporated by reference to the Company’s Registration Statement on Form 10).

4 Description of Specimen Stock Certificate (incorporated by reference to the Company’s Registration Statement on Form 10).

10.1 Preformed Line Products Company 1999 Employee Stock Option Plan (incorporated by reference to the Company’s Registration Statement on Form 10).*

10.2 Preformed Line Products Company Officers Bonus Plan (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2007).*

10.3 Preformed Line Products Company Executive Life Insurance Plan — Summary (incorporated by reference to the Company’s Registration Statement on Form 10).*

10.4 Preformed Line Products Company Supplemental Profit Sharing Plan (incorporated by reference to the Company’s Registration Statement on Form 10).*

10.5 Revolving Credit Agreement between National City Bank and Preformed Line Products Company, dated December 30, 1994 (incorporated by reference to the Company’s Registration Statement on Form 10).

10.6 Amendment to the Revolving Credit Agreement between National City Bank and Preformed Line Products Company, dated October 31, 2002 (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2003).*

10.7 Preformed Line Products Company 1999 Employee Stock Option Plan Incentive Stock Option Agreement (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2004).

10.8 Stock Purchase Agreement, dated March 22, 2007, by and among the Company and Claudia W. Goodreau, Kevin M. Goodreau, Dora Ely Randall and Jeffrey J. Randall to acquire Direct Power and Water Corporation (incorporated by reference to the Company’s 10-Q filing for the quarter ended March 31, 2007).

10.9 Conditional Share Purchase Agreement, dated April 22, 2007, by and among the Company and BBO Spolka Z o.o. to acquire a holding in Zaklady Wytworcze Sprzetu Sieciowego “Belos” SA (incorporated by reference to the Company’s 10-Q filing for the three-month and six-month ended June 30, 2007).

10.10 Preformed Line Products Company Chief Executive Officer Bonus Plan (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2007).

10.11 Preformed Line Products Company Long Term Incentive Plan of 2008 (incorporated by reference to the Company’s 8-K current report filing dated May 1, 2008).*

10.12 Deferred Shares Plan (incorporated by reference to the Company’s 8-K current report filing dated August 21, 2008).*

10.13 Form of Restricted Shares Grant Agreement (incorporated by reference to the Company’s 10-Q filing for the quarter ended September 30, 2008). *

10.14 Agreement and Plan of Merger, dated May 30, 2008, by and among the Company and Optical Cable Corporation to divest Superior Modular Company Inc. (incorporated by reference to the Company’s 8-K current report filing dated May 30, 2008).

14.1 Preformed Line Products Company Code of Conduct (incorporated by reference to the Company’s 8-K current report filing dated August 6, 2007).

21 Subsidiaries of Preformed Line Products Company, filed herewith.

23.1 Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm, filed herewith.

23.2 Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm, filed herewith.

31.1 Certifications of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2 Certification of the Principal Financial Officer, Eric R. Graef, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1 Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

32.2 Certification of the Principal Accounting Officer, Eric R. Graef, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

* Indicates management contracts or compensatory plan or arrangement.

EX-2.1

Exhibit 2.1

STOCK AND ASSET PURCHASE AGREEMENT

by and between

TYCO ELECTRONICS GROUP S.A.

and

PREFORMED LINE PRODUCTS COMPANY

DATED OCTOBER 22, 2009

TABLE OF CONTENTS

	Page
ARTICLE I DEFINITIONS AND TERMS		1
Section 1.1 Definitions		1
Section 1.2 Construction		13
Section 1.3 Exhibits and Seller Disclosure Letter		14
Section 1.4 Knowledge		14
ARTICLE II PURCHASE AND SALE		14
Section 2.1 Purchase and Sale of the Equity Interests		14
Section 2.2 Purchase and Sale of the Purchased Assets		15
Section 2.3 Excluded Assets of the Business		16
Section 2.4 Assumption of Certain Obligations of the Business		18
Section 2.5 Retained Liabilities of the Business		19
Section 2.6 Consents		20
Section 2.7 Purchase Price		21
Section 2.8 Purchase Price Adjustment		21
Section 2.9 Purchase Price Allocation		23
Section 2.10 Closing		24
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER		25
Section 3.1 Organization and Qualification		25
Section 3.2 Corporate Authority; Binding Effect		25
Section 3.3 Conveyed Companies; Capital Structure		26
Section 3.4 Non-Contravention		26
Section 3.5 Permits		26
Section 3.6 Absence of Certain Changes		27
Section 3.7 No Litigation		27
Section 3.8 Compliance with Laws		27
Section 3.9 Environmental Matters		27
Section 3.10 Material Contracts		28
Section 3.11 Intellectual Property		29
Section 3.12 Real Property		30
Section 3.13 Employee Benefit Plans		31
Section 3.14 Labor and Employment Matters		32
Section 3.15 Taxes		32
Section 3.16 Financial Disclosures; No Undisclosed Liabilities		33
Section 3.17 Receivables; Customers		34
Section 3.18 Inventory		34
Section 3.19 Brokers		34
Section 3.20 Title to Purchased Assets; Sufficiency		34
Section 3.21 Absence of Certain Business Practices		34
Section 3.22 Insurance		35

-i-

	Page
Section 3.23 No Heliform Product Manufacturing in India		35
Section 3.24 Exclusivity of Representations		35
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER		35
Section 4.1 Organization and Qualification		35
Section 4.2 Corporate Authority		35
Section 4.3 Non-Contravention		36
Section 4.4 Permits		36
Section 4.5 Third-Party Approvals		36
Section 4.6 Financial Capability		36
Section 4.7 Securities Act		36
Section 4.8 Investigation by Purchaser; Seller’s Liability		36
Section 4.9 No Litigation		37
Section 4.10 Brokers		37
Section 4.11 Solvency		37
Section 4.12 Confidentiality Agreement		37
Section 4.13 Absence of Arrangements with Management		37
ARTICLE V COVENANTS		38
Section 5.1 Information and Documents		38
Section 5.2 Conduct of Business		38
Section 5.3 Efforts to Close		40
Section 5.4 Antitrust Laws		40
Section 5.5 Business Employees and Employee Benefits		41
Section 5.6 Wage Reporting		44
Section 5.7 Non-Competition		44
Section 5.8 Collection of Accounts Receivable		45
Section 5.9 Intellectual Property Rights and Restrictions		45
Section 5.10 Resale or Other Exemption Certificates		47
Section 5.11 Post-Closing Information		47
Section 5.12 Indemnification of Officers and Directors		47
Section 5.13 Replacement of Parent Guarantees		48
Section 5.14 Exclusive Dealing		49
Section 5.15 No Hire and Non-Solicitation of Employees		49
Section 5.16 Post-Closing Obligations for Leases		50
Section 5.17 Confidentiality		50
Section 5.18 Insurance Recovery		51
Section 5.19 Foreign Corrupt Practices Act		51
Section 5.20 Juarez Transition		53
Section 5.21 Supply Provisions		53
Section 5.22 Applicable Employee		54
ARTICLE VI CONDITIONS PRECEDENT		54
Section 6.1 Conditions to the Obligations of Each Party		54
Section 6.2 Conditions to the Obligations of Purchaser		55
Section 6.3 Conditions to the Obligations of Seller		55

-ii-

	Page
Section 6.4 Frustration of Closing Conditions		56
ARTICLE VII TAX MATTERS		56
Section 7.1 Allocation of Taxes to Seller		56
Section 7.2 Allocation of Taxes to Purchaser		57
Section 7.3 Allocation of Straddle Period Taxes		57
Section 7.4 Tax Returns; Payment of Taxes		58
Section 7.5 Tax Contests		59
Section 7.6 Indemnification		61
Section 7.7 Refunds		63
Section 7.8 Assistance and Cooperation		64
Section 7.9 Tax Records		64
Section 7.10 Dispute Resolution		64
Section 7.11 Payment		65
Section 7.12 Termination of Tax Allocation Agreements		65
Section 7.13 Adjustment		65
Section 7.14 Survival of Representations and Warranties Relating to Taxes		65
ARTICLE VIII SURVIVAL; INDEMNIFICATION		65
Section 8.1 Survival of Representations and Warranties		65
Section 8.2 Indemnification by Seller		66
Section 8.3 Indemnification by Purchaser		66
Section 8.4 Limitation on Indemnification, Mitigation		66
Section 8.5 Losses Net of Insurance, Etc		68
Section 8.6 Indemnification Procedure		68
Section 8.7 Third-Party Claims		69
Section 8.8 Sole Remedy/Waiver		70
Section 8.9 Other Limitations		70
ARTICLE IX TERMINATION		71
Section 9.1 Termination		71
Section 9.2 Effect of Termination		71
ARTICLE X MISCELLANEOUS		72
Section 10.1 Notices		72
Section 10.2 Amendment; Waiver		73
Section 10.3 Assignment		73
Section 10.4 Entire Agreement		73
Section 10.5 Parties in Interest		73
Section 10.6 Public Disclosure		74
Section 10.7 Return of Information		74
Section 10.8 Expenses		74
Section 10.9 Schedules		74
Section 10.10 Governing Law; Waiver of Jury Trial; Limitation of Liability		74
Section 10.11 Counterparts		75

-iii-

	Page
Section 10.12 Headings		75
Section 10.13 No Strict Construction		75
Section 10.14 Severability		75
Section 10.15 Specific Performance		75
Section 10.16 Inventory		2
Section 10.17 Inventory Reserves		3

EXHIBITS

Exhibit A	Summary of Significant Accounting Principles
Exhibit B	Form of Transition Services Agreement

-iv-

STOCK AND ASSET PURCHASE AGREEMENT

          This Stock and Asset Purchase Agreement (this “Agreement”) is made and entered into this 22nd day of October, 2009 between Tyco Electronics Group S.A., a company organized under the laws of Luxembourg (“Seller”), and Preformed Line Products Company, an Ohio corporation (“Purchaser”). Seller and Purchaser are herein referred to individually as a “Party” and collectively as the “Parties.”

W I T N E S S E T H:

          WHEREAS, Seller, through certain of its Subsidiaries, is engaged in the Business;

          WHEREAS, Seller is the direct or indirect owner of controlling stock or limited liability company interests in the Equity Selling Entities as set forth in Schedule 1.1(b) of the Seller Disclosure Letter and of controlling stock or limited liability company interests in the Asset Selling Entities as set forth in Schedule 1.1(a) of the Seller Disclosure Letter;

          WHEREAS, the Equity Selling Entities are the record, registered and beneficial owners of the issued and outstanding shares of capital stock or limited liability company interests (collectively, the “Equity Interests”) of the Conveyed Companies, as set forth in Schedule 3.3(b) of the Seller Disclosure Letter;

          WHEREAS, the Asset Selling Entities own, license or lease the Purchased Assets; and

          WHEREAS, the Parties desire that, at the Closing, (i) Seller shall cause the Equity Selling Entities to sell and transfer to Purchaser, and Purchaser shall purchase from the Equity Selling Entities, all of the Equity Interests of the Conveyed Companies owned by such Equity Selling Entities, and (ii) Seller shall cause the Asset Selling Entities to sell and transfer to Purchaser, and Purchaser shall purchase from the Asset Selling Entities, all of the Purchased Assets and assume all of the Assumed Liabilities, upon the terms and conditions set forth herein.

          NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS AND TERMS

          Section 1.1 Definitions. As used in this Agreement, the following terms shall have the meanings set forth or as referenced below:

          “2009 Fiscal Year” means Seller’s fiscal year ending September 25, 2009.

          “Accountant” shall mean KPMG LLP.

          “Accounts Receivable” shall have the meaning set forth in Exhibit A.

          “Action” shall mean any action, complaint, claim, petition, litigation, suit, arbitration or other proceeding, whether civil or criminal, at law or in equity, before any Governmental Authority relating to this Agreement or the transactions contemplated hereby.

          “Actual Value” shall have the meaning set forth in Section 2.8(b)(iii).

          “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person; provided, that for the purposes of this definition, “control” (including with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

          “Aggregate Purchase Price” shall have the meaning set forth in Section 2.7.

          “Agreed Claims” shall have the meaning set forth in Section 8.6(c).

          “Agreement” shall have the meaning set forth in the preamble.

          “Allocation” shall have the meaning set forth in Section 2.9(a).

          “Antitrust Authorities” shall mean the Federal Trade Commission, the Antitrust Division of the United States Department of Justice, the attorneys general of the several states of the United States of America, and any other Governmental Authority having jurisdiction pursuant to applicable Antitrust Laws with respect to the transactions contemplated hereby.

          “Antitrust Laws” shall mean the Sherman Act of 1890, as amended, the Clayton Act of 1914, as amended, the Federal Trade Commission Act of 1914, as amended, the HSR Act, and all other national, state, local or foreign Laws or Orders in effect from time to time that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade.

          “Applicable Employee” means the individual identified on Schedule 5.22 of the Seller Disclosure Letter.

          “Arbiter” shall have the meaning set forth in Section 2.9(b).

          “Asset Closing Payment” shall have the meaning set forth in Section 2.7(b).

          “Asset Selling Entity” shall mean each entity listed as such on Schedule 1.1(a) of the Seller Disclosure Letter, and all such entities shall be referred to collectively as the “Asset Selling Entities.”

          “Asset Selling Entity Business Employee” shall have the meaning set forth in the definition of “Business Employee” in this Section 1.1.

          “Assumed Contracts” shall have the meaning set forth in Section 2.2(c).

          “Assumed Intercompany Payables” shall mean the intercompany payables due and owing among Conveyed Companies and Asset Selling Entities and any of their respective Affiliates for goods and services bought and sold.

          “Assumed Intercompany Receivables” shall mean the intercompany receivables due and owing among Conveyed Companies and Asset Selling Entities and any of their respective Affiliates for goods and services bought and sold.

          “Assumed Liabilities” shall have the meaning set forth in Section 2.4.

          “Benefit Plan” shall mean each “employee benefit plan” as defined in Section 3(3) of ERISA (whether or not subject to ERISA) and each other bonus, stock option, equity, severance, employment, change-in-control, fringe benefit, deferred compensation, perquisite or incentive plan, agreement, program or policy, whether written or unwritten, contributed to or maintained by an Asset Selling Entity, a Conveyed Company or any Affiliate of either for the benefit of any Business Employee.

          “Business” shall mean the operation as of the date hereof of Seller’s Dulmison business which designs, manufactures and distributes medium-voltage and high-voltage overhead line fittings, including vibration dampening and control products and heliformed products for use by electrical utilities and communication and cable infrastructure providers. For the avoidance of doubt, the Tyco Core Businesses, and any portion thereof, are not included in the Business.

          “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banks in New York City are authorized or obligated by Law or executive order to close.

          “Business Employee” shall mean (i) each individual listed on Schedule 1.1(c) of the Seller Disclosure Letter who performs (or will, on commencing work, perform) services on behalf of the Business (an “Asset Selling Entity Business Employee”), (ii) any employee of a Conveyed Company (a “Conveyed Company Business Employee”), including an employee absent on the Closing Date because of illness or being on short-term or long-term disability (including maternity disability), workers’ compensation, vacation, parental leave of absence, military leave of absence or other absence or leave of absence or (iii) any individual that has received an offer of employment with the Business from an Asset Selling Entity, or a Conveyed Company on or prior to the Closing Date, but shall have not yet commenced work as of the Closing Date. Any employee of Seller or its Affiliates who is not otherwise a Business Employee but who is offered and accepts employment with Purchaser or its Affiliates in connection with the transactions contemplated hereby, pursuant to mutual agreement with Seller and otherwise in compliance with Section 5.15 hereof, during the thirty (30) days following the Closing Date, shall be deemed to be a Business Employee as of the date of actual employment or engagement with Purchaser or its Affiliates. The individuals listed on Schedule 1.1(d) of the Seller Disclosure Letter shall not be deemed to be Business Employees. For avoidance of doubt,

“Business Employee” shall not include an employee of an Asset Selling Entity who has been terminated or has terminated his or her employment, or has retired, prior to the date hereof.

          “Business Records” shall have the meaning set forth in Section 7.9.

          “Cash and Cash Equivalents” shall mean cash, checks, money orders, marketable securities, short-term instruments and other cash equivalents, funds in time and demand deposits or similar accounts, and any evidence of Indebtedness issued or guaranteed by any Governmental Authority.

          “Claim Certificate” shall have the meaning set forth in Section 8.6(a).

          “Closing” shall mean the closing of the transactions contemplated by this Agreement pursuant to the terms and conditions of this Agreement.

          “Closing Cash” shall mean the aggregate book balance of Cash and Cash Equivalents of the Conveyed Companies and Asset Selling Entities as of the Closing Date calculated in a manner consistent with the policies and principles set forth on Exhibit A and transferred to Purchaser at Closing, if any.

          “Closing Cash Amount” shall have the meaning set forth in Section 2.8(b).

          “Closing Date” shall have the meaning set forth in Section 2.10(a).

          “Closing Payment” shall have the meaning set forth in Section 2.7(b).

          “Closing Statement” shall have the meaning set forth in Section 2.8(a).

          “Closing Working Capital” shall have the meaning set forth in Section 2.8(a).

          “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

          “Collateral Source” shall have the meaning set forth in Section 8.5.

          “Confidentiality Agreement” shall mean the Confidentiality Agreement dated as of December 10, 2007, between Seller and Purchaser.

          “Contest” shall mean any audit, court proceeding or other dispute with respect to any Tax matter that affects any of the Conveyed Companies.

          “Contract” shall mean any legally binding agreement or contract (other than any purchase orders), including all amendments thereto.

          “Conveyed Companies” shall mean those entities listed on Schedule 3.3(b) of the Seller Disclosure Letter, and each of the Conveyed Companies shall be referred to individually as a “Conveyed Company.”

          “Conveyed Company Business Employee” shall have the meaning set forth in the definition of “Business Employee” in this Section 1.1.

          “Conveyed Company Covered Person” shall have the meaning set forth in Section 5.12.

          “Deductible” shall have the meaning set forth in Section 8.4(a)(iii).

          “Disputed Item” shall have the meaning set forth in Section 2.8(b).

          “Dollars” and “$” shall each mean lawful money of the United States.

          “Effective Time” shall have the meaning set forth in Section 2.10(a).

          “End Date” shall have the meaning set forth in Section 9.1(b).

          “Environmental Law” shall mean any Law, Order or other requirement of Law for the protection of human health or the environment, or for the manufacture, use, transport, treatment, storage, disposal, discharge, emission, release or threatened release of Hazardous Materials, petroleum products, asbestos, urea formaldehyde insulation, polychlorinated biphenyls or any substance listed, classified or regulated as “hazardous” or “toxic” or any similar term under such Environmental Law.

          “Equipment” shall have the meaning set forth in Section 2.2(b).

          “Equipment Leases” shall have the meaning set forth in Section 2.2(b).

          “Equity Closing Payment” shall have the meaning set forth in Section 2.7(a).

          “Equity Interests” shall have the meaning set forth in the recitals hereto.

          “Equity Selling Entity” shall mean each entity listed as such on Schedule 1.1(b) of the Seller Disclosure Letter, and all such entities shall be referred to collectively as the “Equity Selling Entities.”

          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

          “Evaluation Material” shall have the meaning set forth in Section 5.1(b).

          “Excluded Accounts Receivable” shall have the meaning set forth in Section 2.2(h).

          “Excluded Assets” shall have the meaning set forth in Section 2.3(a).

          “Excluded Contracts” shall have the meaning set forth in Section 2.3(a)(ix).

          “Excluded Employee Liabilities” means, except as set forth in Section 5.5(f), (i) all Liabilities arising from claims relating to wrongful dismissal or termination made by former employees of the Conveyed Companies who were terminated in that certain redundancy termination by Tyco Electronics Dulmison (Thailand) Co., Ltd. in April and May 2009 of approximately 17 employees, (ii) all Liabilities arising from claims made by employees of the Asset Selling Entities not employed on the date hereof, and (iii) Liabilities attributable to Tax equalization obligations owing to any Business Employee for any period prior to Closing other than Liabilities accrued in the Closing Working Capital.

          “Excluded Environmental Liabilities” shall mean all Liabilities arising prior to, on or after the Closing under any Environmental Law or related to Hazardous Materials in connection with any real property or facility currently or formerly owned, leased or operated by any Asset Selling Entity, other than any such Liability due to a condition or state of facts arising after Closing due to a change in the operation of the Business by Purchaser or its Affiliates, successors or assigns.

          “Excluded Warranty Obligations” means all Liabilities for warranty obligations arising from items 5 through 9 listed on Schedule 1.1(e) of the Seller Disclosure Letter.

          “Final Closing Working Capital” shall have the meaning set forth in Section 2.8(b).

          “Final Determination” means, with respect to any Taxes, (i) the expiration of the statute of limitations on both assessments and refunds of such Taxes, or (ii) the final settlement of Taxes through agreement of the Parties or by an administrative or judicial decision from which no appeal can be taken or for which the time for taking any such appeal has expired.

          “Financial Disclosures” shall have the meaning set forth in Section 3.16(a).

          “GAAP” shall mean generally accepted accounting principles in the United States in effect as of the date hereof.

          “Governmental Authority” shall mean any instrumentality, subdivision, court, administrative agency, commission, official or other authority of any country, state, province, prefect, municipality, locality or other government or political subdivision thereof, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority.

          “Gross Asset Purchase Price” shall have the meaning set forth in Section 2.7.

          “Gross Equity Purchase Price” shall have the meaning set forth in Section 2.7.

          “Gross Purchase Price” shall have the meaning set forth in Section 2.7.

          “Hazardous Materials” shall mean any waste pollutant, contaminant, hazardous substance, toxic, ignitable, flammable, reactive or corrosive substance, hazardous waste, special

waste, industrial substance, byproduct, process intermediate product or waste, petroleum or petroleum derived substance or waste, chemical liquids or solids, liquid or gaseous products, or any constituent or any such stances or waste, the use, handling, storage or disposal of which is in any way governed by any Environmental Law.

          “High Value” shall have the meaning set forth in Section 2.8(b)(ii).

          “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time.

          “Identified Losses” shall have the meaning set forth in Section 8.4(a)(i).

          “Income Taxes” shall mean any Taxes based on, measured by or calculated with respect to gross or net income or gross receipts (including capital gains Taxes, minimum Taxes, income Taxes collected by withholding, and Taxes on Tax preference items, but excluding sales Taxes, value-added Taxes, or similar Taxes), together with any interest, penalties, or additions imposed with respect thereto, whether disputed or not.

          “Indebtedness” of any Person shall mean indebtedness of such Person for borrowed money. For the avoidance of doubt, Indebtedness shall not include any capitalized lease obligations or any current liabilities for trade payables or accrued expenses (including Taxes) incurred and payable in the ordinary course of business.

          “Indemnified Party” shall have the meaning set forth in Section 8.6(a).

          “Indemnifying Party” shall have the meaning set forth in Section 8.6(a).

          “Insulator Business” means the design, manufacture and distribution of porcelain, polymeric and hybrid insulators.

          “Intellectual Property” shall mean any of the following: United States or foreign (i) patents, and applications therefor; (ii) registered and unregistered trademarks, service marks and other indicia of origin, pending trademark and service mark registration applications, and intent-to-use registrations or similar reservations of marks; (iii) registered and unregistered copyrights and applications for registration; (iv) internet domain names, applications and reservations therefor and uniform resource locators; and (v) trade secrets, technology, know-how and proprietary information not otherwise listed in (i) through (iv) above, including unpatented inventions, invention disclosures, utility innovations, registered and unregistered industrial designs, moral and economic rights of authors and inventors (however denominated), confidential information, technical data, customer lists, computer software programs, databases, data collections and other proprietary information or material of any type, regardless of form.

          “Intellectual Property Licenses” shall mean Contracts pursuant to which an Asset Selling Entity or Conveyed Company is a licensee of any Intellectual Property which is used primarily in the Business.

          “Inventory” shall mean any inventory, including goods, goods-in-transit, supplies, containers, packaging materials, raw materials, work-in-progress, finished goods, purchased and manufactured parts, samples and other consumables.

          “IRS” shall mean the Internal Revenue Service of the United States of America.

          “Juarez Transition” shall have the meaning set forth in Section 5.20.

          “Knowledge of Seller” shall have the meaning set forth in Section 1.4.

          “Law” shall mean any federal, state, territorial, foreign or local law, common law, statute, ordinance, rule, regulation or code of any Governmental Authority.

          “Liabilities” shall mean any and all debts, liabilities and obligations, whether accrued or fixed, known or unknown, absolute or contingent, matured or unmatured or determined or determinable.

          “Liens” shall mean any lien, security interest, mortgage, encumbrance or charge of any kind.

          “Loss” or “Losses” shall mean any claims, actions, causes of action, judgments, awards, out-of-pocket losses and out-of-pocket costs or damages (including reasonable attorneys’ fees and expenses, but excluding lost profits, lost revenues, lost opportunities and consequential, indirect, punitive and other special damages regardless of the legal theory).

          “Low Value” shall have the meaning set forth in Section 2.8(b)(i).

          “Lower Working Capital Limit” shall have the meaning set forth in Section 2.8(c)(i).

          “Material Adverse Effect” shall mean any change or effect having a material adverse effect on the business, properties, assets, operations, results of operations or financial condition of the Business; provided, however, that changes or effects relating to: (i) changes in economic or political conditions or the financing, banking, currency or capital markets in general; (ii) changes in Laws, changes in Orders (that are not specific to Seller or any of its Affiliates), or interpretations thereof or changes in accounting requirements or principles (including GAAP); (iii) changes (including those caused by acts of God) affecting industries, markets or geographical areas in which the Business operates that do not have a materially disproportionate effect on the Business in comparison with other businesses operating in the same industries, markets or geographical areas as the Business; (iv) the announcement or pendency of the transactions contemplated by this Agreement or other communication by Purchaser or any of its Affiliates of its plans or intentions (including in respect of employees) with respect to the Business, including losses or threatened losses of employees, customers, suppliers, distributors or others having relationships with the Business; (v) the consummation of the transactions contemplated by this Agreement or any actions by Purchaser or Seller taken pursuant to and in accordance with this Agreement; (vi) conduct by the Business (A) prohibited under Section 5.2 to which Purchaser gave its prior written consent or (B) prohibited under Section 5.2, which, if taken by the Business, would have prevented or mitigated any resulting

material adverse effect on the results of operations or financial condition of the Business; (vii) any action required to be taken under any Law or Order generally applicable to businesses in the industry in which the Business operates and that does not have a materially disproportionate effect on the Business or under any existing Contract by which the Business (or any of the assets or properties of the Business) is bound; (viii) (A) proposing, negotiating, committing to or effecting, by consent decree, hold separate order or otherwise, the sale, transfer, divestiture, license or disposition of operations, divisions, businesses, product lines, customers or assets arising from Purchaser’s compliance with its obligations under Section 5.4 or (B) the application of Antitrust Laws (including any action or judgment arising under Antitrust Laws) to the transactions contemplated by this Agreement; or (ix) any failure by the Business to meet any internal projections or forecasts (but not the underlying causes of any such failure) and seasonal changes in the results of operations of the Business, in each case, shall be deemed to not constitute a “Material Adverse Effect” and shall not be considered in determining whether a “Material Adverse Effect” has occurred.

          “Material Contracts” shall have the meaning set forth in Section 3.10(a).

          “Material Purchase Order” shall have the meaning set forth in Section 3.10(a)(xi).

          “Order” shall mean any judgment, order, injunction, decree, writ, permit or license of any Governmental Authority or any arbiter.

          “Parent Guarantees” shall have the meaning set forth in Section 5.13(a).

          “Parent LofCs” shall have the meaning set forth in Section 5.13(a).

          “Parties” shall have the meaning set forth in the preamble of this Agreement.

          “Party” shall have the meaning set forth in the preamble of this Agreement.

          “Payee” shall have the meaning set forth in Section 7.11.

          “Payor” shall have the meaning set forth in Section 7.11.

          “Per-Claim Deductible” shall have the meaning set forth in Section 8.4(a)(ii).

          “Permit” shall mean each permit, certificate, license, consent, approval or authorization of any Governmental Authority.

          “Permitted Liens” shall mean: (i) Liens for Taxes, assessments and other governmental charges that are not yet due and payable or that may be paid after payment thereof is due and payable without penalty or the amount or validity of which is being contested in good faith by appropriate proceedings; (ii) Liens arising in the ordinary course of business under original purchase price conditional sales Contracts and equipment leases with third parties; (iii) easements, covenants, conditions and restrictions of record that do not adversely affect the conduct of the Business in any material respect as conducted during the twelve month period ending on the date hereof; (iv) any zoning or other governmentally established restrictions or encumbrances on land use; (v) pledges or deposits to secure obligations under workers or

unemployment compensation Laws or similar legislation or to secure statutory obligations; (vi) mechanic’s, materialman’s or warehouse man’s Liens arising or incurred in the ordinary course of business securing amounts that are not overdue; (vii) other Liens, if any, that do not have or would not reasonably be expected to have, individually or in the aggregate, any material effect on the use of the property encumbered thereby; and (viii) Liens listed on Schedule 1.1(f) of the Seller Disclosure Letter.

          “Person” shall mean an individual, a limited liability company, a joint venture, a corporation, a company, a partnership, an association, a trust, a division or operating group of any of the foregoing or any other entity or organization, including any Governmental Authority.

          “Pre-Closing Period” shall have the meaning set forth in Section 7.4(b).

          “Purchased Assets” shall have the meaning set forth in Section 2.2, it being understood that the Purchased Assets do not include the Excluded Assets or the Equity Interests.

          “Purchased Division” shall have the meaning set forth in Section 5.9(a).

          “Purchased Marks” shall have the meaning set forth in Section 5.9(b).

          “Purchaser” shall have the meaning set forth in the preamble of this Agreement.

          “Purchaser Indemnitees” shall have the meaning set forth in Section 8.2.

          “Purchaser Representative” shall mean any of Purchaser’s directors, officers, employees, advisors and agents to whom Evaluation Material (as defined in the Confidentiality Agreement) was disclosed under the Confidentiality Agreement.

          “Purchaser’s Refunds” shall have the meaning set forth in Section 7.7(b).

          “Real Property” shall have the meaning set forth in Section 3.12(a).

          “Real Property Lease” shall have the meaning set forth in Section 3.12(c).

          “Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leeching, dumping or disposing into the environment, including but not limited to, any surface or groundwater, drinking water supply, soil, surfaces or subsurface strata or medium or the ambient air.

          “Representatives” of any Person shall mean such Person’s directors, managers, members, officers, employees, agents, advisors and representatives (including attorneys, accountants, consultants, financial advisors, financing sources and any representatives of such advisors or financing sources).

          “Requesting Party” shall have the meaning set forth in Section 5.11(a).

          “Restricted Customers” shall have the meaning set forth in Section 5.7.

          “Restricted Period” shall have the meaning set forth in Section 5.7.

          “Restricted Products” shall mean the heliformed and vibration dampening control products set forth on Schedule 1.1(g) of the Seller Disclosure Letter and any substantially similar products primarily using the same technologies and specifications as such products.

          “Retained Liabilities” shall have the meaning set forth in Section 2.5(a).

          “Retention Bonus” shall mean any bonus payment identified as a sale completion or retention bonus in an agreement listed on Schedule 1.1(h) of the Seller Disclosure Letter.

          “Retention Period” shall have the meaning set forth in Section 5.22.

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

          “Seller” shall have the meaning set forth in the preamble of this Agreement.

          “Seller Disclosure Letter” shall have the meaning set forth in the preamble to Article III.

          “Seller Entities” shall mean, collectively, the Equity Selling Entities and the Asset Selling Entities, and each of the Seller Entities shall be referred to individually as a “Seller Entity.”

          “Seller Indemnitees” shall have the meaning set forth in Section 8.3.

          “Seller’s Refunds” shall have the meaning set forth in Section 7.7(a).

          “Seller’s Marks” shall have the meaning set forth in Section 5.9.

          “Seller’s Taxes” shall have the meaning set forth in Section 7.1.

          “Solvent” shall mean, with respect to any Person, that (i) the property of such Person, at a present fair saleable valuation, exceeds the sum of its Liabilities (including contingent and unliquidated Liabilities), (ii) the present fair saleable value of the property of such Person exceeds the amount that will be required to pay such Person’s probable Liabilities as they become absolute and matured, (iii) such Person has adequate capital to carry on its business and (iv) such Person does not intend to incur, or believe it will incur, Liabilities beyond its ability to pay as such Liabilities mature. In computing the amount of contingent or unliquidated Liabilities at any time, such Liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become actual or matured Liabilities.

          “Straddle Period” shall have the meaning set forth in Section 7.3(a).

          “Subsidiary” shall mean, with respect to any Person, (i) any corporation more than fifty percent (50%) of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might

have voting power by reason of the happening of any contingency) is owned by such Person directly or indirectly through one or more Subsidiaries of such Person and (ii) any partnership, association, joint venture or other entity in which such Person directly or indirectly through one or more Subsidiaries of such Person has more than a fifty percent (50%) equity interest.

          “Target Closing Working Capital” shall have the meaning set forth on Exhibit A.

          “Tax Claim” shall have the meaning set forth in Section 7.6(d).

          “Tax Indemnified Party” shall have the meaning set forth in Section 7.6(d).

          “Tax Indemnifying Party” shall have the meaning set forth in Section 7.6(d).

          “Tax Notice” shall have the meaning set forth in Section 7.6(d).

          “Tax Objection Notice” shall have the meaning set forth in Section 7.6(e).

          “Tax Records” shall have the meaning set forth in Section 7.9.

          “Tax Return” shall mean any return, declaration or report relating to Taxes due, any information return with respect to Taxes, or other similar report, statement, declaration or document required to be filed under the Code or other Laws in respect of Taxes, any amendment to any of the foregoing, any claim for refund of Taxes paid, and any attachments, amendments or supplements to any of the foregoing.

          “Taxes” shall mean any federal, state, county, local, or foreign tax (including Transfer Taxes), charge, fee, levy, impost, duty, or other assessment, including income, gross receipts, excise, employment, sales, use, transfer, recording, license, payroll, franchise, severance, documentary, stamp, occupation, windfall profits, environmental, highway use, commercial rent, customs duty, capital stock, paid-up capital, profits, withholding, Social Security, single business, unemployment, disability, real property, personal property, registration, ad valorem, value added, alternative or add-on minimum, estimated, or other tax or governmental fee of any kind whatsoever, imposed or required to be withheld by any Governmental Authority, including any estimated payments relating thereto, any interest, penalties, and additions imposed thereon or with respect thereto, whether disputed or not, and including liability for taxes of another person under Treas. Reg. Section 1.1502-6 or similar provision of state, local or foreign law, or as a transferee or successor, by contract or otherwise.

          “Taxing Authority” shall mean any Governmental Authority having jurisdiction over the assessment, determination, collection, or other imposition of any Taxes.

          “Taxing Authority Notice” shall have the meaning set forth in Section 7.6(d).

          “Third-Party Claim” shall have the meaning set forth in Section 8.7(a).

          “Threshold” shall have the meaning set forth in Section 8.4(a)(iii).

          “Tyco Core Businesses” shall mean, as of the date hereof, the Tyco Electronics (i) electronic systems business segment, which manufactures passive electronic components, including connectors and interconnect systems, relays, switches, circuit protection devices, touch screens, application tools and machinery, sensors and wires and cable, for use in the automotive, computer, consumer electronics, communication equipment, appliance, aerospace and defense, industrial machinery and instrumentation markets; (ii) except for the Business, network solutions business segment, which supplies infrastructure components, including connectors, above- and below-ground enclosures, ceramic insulation products, heat shrink tubing, non-power related cable accessories, surge arrestors, fiber optic cabling, copper cabling and racks for copper and fiber networks, to the telecommunications and energy markets; and (iii) business that manufactures, distributes, maintains and installs undersea telecommunication systems, in each case as conducted during the twelve month period ending on the date hereof.

          “Transfer Taxes” means all stamp, transfer, real property transfer, recordation, grantee/grantor, documentary, sales and use, value added, registration, occupation, privilege, or other such similar Taxes, fees and costs (including any penalties and interest) incurred in connection with the consummation of the transactions contemplated by this Agreement.

          “Transferred Employee” and “Transferred Employees” shall have the meaning set forth in Section 5.5(b).

          “Transferred Intellectual Property” shall have the meaning set forth in Section 2.2(e).

          “Transition Services Agreement” means the transition services agreement between Seller and Purchaser in substantially the form of Exhibit B.

          “Upper Working Capital Limit” shall have the meaning set forth in Section 2.8(c)(i).

          “Working Capital” shall mean the current assets of the Business (excluding Closing Cash, deferred Income Tax assets and Income Tax receivables) less the current liabilities of the Business (excluding deferred Income Tax liabilities and accrued Income Tax liabilities), in each case included in the Purchased Assets and Assumed Liabilities or owned or owing by the Conveyed Companies, as the case may be, taken as a whole and determined in accordance with the policies, principles, practices and methodologies set forth on Exhibit A.

          Section 1.2 Construction. In this Agreement, unless the context otherwise requires:

          (a) any reference in this Agreement to “writing” or comparable expressions includes a reference to facsimile transmission or comparable means of communication (but excludes e-mail communications);

          (b) the phrases “delivered” or “made available”, when used in this Agreement, shall mean that the information referred to has been physically or electronically delivered to the relevant parties including, in the case of “made available” to Purchaser, material that has been posted prior to the date hereof in the “data room” (virtual or otherwise) established by Seller;

          (c) words expressed in the singular number shall include the plural and vice versa, and words expressed in the masculine shall include the feminine and neuter genders and vice versa;

          (d) references to Articles, Sections, Exhibits, Schedules and Recitals are references to articles, sections, exhibits, schedules and recitals of this Agreement;

          (e) references to “day” or “days” are to calendar days;

          (f) references to “the date hereof” shall mean as of the date of this Agreement;

          (g) unless expressly indicated otherwise, the words “hereof”, “herein”, “hereto” and “hereunder”, and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any provision of this Agreement;

          (h) references to this “Agreement” or any other agreement or document shall be construed as references to this Agreement or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended, varied, novated or supplemented;

          (i) “include”, “includes”, and “including” are deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of similar import; and

          (j) references herein to any Person include references to such Person’s successors and permitted assigns.

          Section 1.3 Exhibits and Seller Disclosure Letter. The Exhibits to this Agreement and the Seller Disclosure Letter are incorporated into and form an integral part of this Agreement. If an Exhibit is a form of agreement, such agreement, when executed and delivered by the parties thereto, shall constitute a document independent of this Agreement.

          Section 1.4 Knowledge. Where any representation or warranty or other provision contained in this Agreement is expressly qualified by reference to the “Knowledge of Seller”, such knowledge shall mean to the actual knowledge of (as distinguished from constructive or imputed knowledge) those individuals listed on Schedule 1.4(a) of the Seller Disclosure Letter, after reasonable inquiry of those persons listed on Schedule 1.4(b) of the Seller Disclosure Letter who are reasonably expected to have direct responsibility for a particular subject matter.

ARTICLE II

PURCHASE AND SALE

          Section 2.1 Purchase and Sale of the Equity Interests. Upon the terms and subject to the conditions set forth herein, at the Closing, the Equity Selling Entities shall, and Seller shall cause the Equity Selling Entities to sell to Purchaser, and Purchaser agrees to purchase from the Equity Selling Entities, free and clear of all Liens, the Equity Interests,

together with all rights and benefits whatsoever attaching to the Equity Interests. The certificates, if any, representing the Equity Interests shall be duly endorsed in blank, or accompanied either by stock powers duly executed in blank by the respective Equity Selling Entities or by such other instruments of transfer as are reasonably acceptable to Purchaser. In connection with Purchaser’s purchase of the Equity Interests in accordance with this Section 2.1, the parties acknowledge and agree that, subject to Section 2.5, each of the Liabilities of the Conveyed Companies (whether arising prior to, at or after the Closing) will remain a Liability of the respective Conveyed Company.

          Section 2.2 Purchase and Sale of the Purchased Assets. Upon the terms and subject to the conditions set forth herein, at the Closing, each Asset Selling Entity shall, and Seller shall cause each Asset Selling Entity to sell, convey, assign and transfer to Purchaser, and Purchaser shall purchase, acquire and accept from each Asset Selling Entity, free and clear of all Liens other than Permitted Liens, all of such Asset Selling Entity’s right, title and interest in the following assets, properties and rights owned, held or used by such Asset Selling Entity (collectively, the “Purchased Assets”), as the same may exist on the Closing Date:

          (a) Closing Cash, if any;

          (b) all personal property and interests therein, including all the equipment, vehicles, machinery, tools, spare parts, furniture and other tangible personal property owned, leased or licensed by the Asset Selling Entities and used primarily in the Business (collectively, the “Equipment”, with the leases relating to any Equipment so leased being referred to herein as the “Equipment Leases”);

          (c) all other Contracts of any Asset Selling Entity relating primarily to the Business (other than the Real Property Leases, Equipment Leases and Contracts relating to the Excluded Assets) (collectively, the “Assumed Contracts”), and all outstanding purchase orders relating primarily to the Business (other than such purchase orders relating to the Excluded Assets);

          (d) all Inventory used primarily in the Business;

          (e) the registered trademarks and copyrights and the patents and any applications for the foregoing set forth on Schedule 2.2(e)(i) of the Seller Disclosure Letter, the computer software programs, source codes and user manuals owned, used or leased by, or licensed to, the Asset Selling Entities set forth on Schedule 2.2(e)(ii) of the Seller Disclosure Letter, and all other Intellectual Property used exclusively in the Business (collectively, “Transferred Intellectual Property”);

          (f) transferable Permits owned, utilized, held or maintained by or licensed to the Asset Selling Entities (subject to the terms of such Permits) relating primarily to the Business;

          (g) all customer, vendor, supplier, contractor, and service-provider lists to the extent relating to the Business, and all files, documents and records (including billing, payment and dispute histories, credit information and similar data) to the extent relating to customers, vendors, suppliers, contractors or service-providers of the Business, and other business and

financial records, files, books and documents (whether in hard copy or computer format) to the extent relating primarily to the Business;

          (h) the accounts and notes receivable of the Business, including Assumed Intercompany Receivables, except for any accounts and notes receivable not able to be specifically identified as accounts or notes receivable of the Business (the “Excluded Accounts Receivable”) and all loans and other advances owing to Seller by any Business Employee who becomes a Transferred Employee;

          (i) all prepaid expenses and deposits and refunds relating directly and primarily to the Business (other than prepaid insurance for the Asset Selling Entities) received after the Closing Date;

          (j) all claims, causes of action, defenses and rights of offset or counterclaim (at any time or in any manner arising or existing, whether choate or inchoate, known or unknown, contingent or noncontingent) relating to any of the Purchased Assets or Assumed Liabilities to be conveyed to and/or assumed by Purchaser as of the Closing Date;

          (k) the goodwill of the Business;

          (l) all advertising, marketing, sales and promotional materials relating primarily to the Business;

          (m) all property and casualty insurance proceeds received or receivable in connection with the damage or complete destruction of any of the Purchased Assets that would have been included in the Purchased Assets but for such damage or complete destruction, in each case net the cost of repair or replacement to the extent that Seller has paid for such repairs or replacement;

          (n) all rights and claims under any and all transferable warranties extended by suppliers, vendors, contractors, manufacturers and licensors in relation to any of the assets described in this Section 2.2;

          (o) the personnel records (including all human resources and other records) of all Transferred Employees to the extent transferable in light of legal and contractual considerations, and

          (p) all other assets set forth on Schedule 2.2(p) of the Seller Disclosure Letter.

          Section 2.3 Excluded Assets of the Business.

          (a) Notwithstanding any provision in this Agreement to the contrary, Purchaser is not purchasing from any of the Asset Selling Entities any of the following (collectively, the “Excluded Assets”), and shall acquire no right to or interest in any Excluded Assets under this Agreement or as a result of the transactions contemplated hereby:

     (i) Cash and Cash Equivalents, other than Closing Cash of the Asset Selling Entities;

     (ii) all intercompany receivables in respect of the Business, other than Assumed Intercompany Receivables, and the Excluded Accounts Receivable;

     (iii) the corporate books and records;

     (iv) all current and prior insurance policies and all rights of any nature with respect thereto, including all insurance proceeds received or receivable thereunder (other than any such amounts included in the Purchased Assets pursuant to Section 2.2(m) or amounts payable to Purchaser pursuant to Section 5.18) and rights to assert claims with respect to any such insurance recoveries;

     (v) assets of any Benefit Plan that is contributed to or maintained for the benefit of any Asset Selling Entity Business Employee;

     (vi) the “Tyco” and “Tyco Electronics” names, marks and logos, and any other item set forth on Schedule 5.9(a) of the Seller Disclosure Letter, and any Intellectual Property relating thereto;

     (vii) all loans and other advances owing to Seller or any of its Affiliates by each Business Employee who does not become a Transferred Employee;

     (viii) the Tax records (including Tax Returns and supporting workpapers) covering any period ending, or any transaction of any Asset Selling Entity occurring, on or prior to the Closing Date;

     (ix) all of the rights and interests of any Asset Selling Entity in and to the Contracts specified in Schedule 2.3(a)(ix) of the Seller Disclosure Letter (the “Excluded Contracts”);

     (x) any assets and associated claims arising out of the Retained Liabilities;

     (xi) all claims, causes of action, defenses and rights of offset or counterclaim (at any time or in any manner arising or existing, whether choate or inchoate, known or unknown, contingent or noncontingent) not included in the Purchased Assets under Section 2.2(j);

     (xii) all of the rights and interests of Seller and its Affiliates (including the Seller Entities) in and to all correspondence and documents, including the confidentiality agreements entered into by Purchaser or any of its Affiliates, in connection with the sale of the Business;

     (xiii) all of the rights and interests of the Asset Selling Entities in all information, files, records, data and recorded knowledge related to or used in connection with the Business, to the extent that any of the foregoing: (i) relate primarily to the Excluded Assets; (ii) relate to the Excluded Assets and can be easily separated from the Purchased Assets; or (iii) are comprised predominantly of written materials that a Seller Entity is required by Law to retain and with respect to which Seller shall have provided (or caused to be provided) a copy to Purchaser;

     (xiv) any legal or beneficial interest in the Internet websites listed on Schedule 2.3(a)(xvi) of the Seller Disclosure Letter, notwithstanding the fact that such sites are related primarily to the Business;

     (xv) all Seller’s Refunds and credits of Taxes due to Seller or any of its Affiliates pursuant to Section 7.7;

     (xvi) all other assets set forth on Schedule 2.3(a)(xvii) of the Seller Disclosure Letter;

     (xvii) any Intellectual Property owned by an Asset Selling Entity and not used in the Business and any computer software programs, source codes and user manuals (excluding items set forth on Schedules 2.2(e)(i) and (e)(ii) of the Seller Disclosure Letter); and

     (xviii) all collective bargaining, union and other similar Contracts covering the Asset Selling Entity Business Employees.

          (b) After the Closing Date, Purchaser shall take all actions (or shall cause its Affiliates to take all actions) reasonably requested by the Seller Entities to effect the provisions of this Section 2.3, including the prompt return of any Excluded Assets that are owned by any Asset Selling Entity and are transferred inadvertently at the Closing.

          Section 2.4 Assumption of Certain Obligations of the Business. In addition to the transfer of the Conveyed Companies, and thereby the Liabilities thereof pursuant to Section 2.1, upon the terms and subject to the conditions of this Agreement, Purchaser agrees, effective at the Closing, to assume and to satisfy and discharge all Liabilities to the extent relating to the Purchased Assets or the Business (except for the Liabilities of the Conveyed Companies, which will remain Liabilities of the Conveyed Companies), whether arising prior to or after the Closing, and whether accrued or fixed, known or unknown, absolute or contingent, matured or unmatured or determined or determinable as of the Closing Date, other than the Retained Liabilities (all of the foregoing liabilities and obligations to be so assumed, satisfied or discharged being herein collectively called the “Assumed Liabilities”). Assumed Liabilities shall include the following:

          (a) all lawsuits to the extent resulting from the conduct of the Business or the ownership of the Equity Interests or the Purchased Assets prior to, at or after the Closing, including lawsuits and claims relating to any alleged Intellectual Property infringement except for Excluded Employee Liabilities;

          (b) all Liabilities, including all lawsuits arising from the design, construction, testing, marketing, service, operation or sale of the products and services of the Business prior to, at or after the Closing, including warranty obligations but excluding Excluded Warranty Obligations and irrespective of any legal theory asserted;

          (c) all Liabilities and other obligations under the Real Property Leases, Equipment Leases and the Assumed Contracts (including all purchase orders in respect thereof) included in the Purchased Assets;

          (d) all accounts payable and other accrued expenses relating to the Business, including accrued Taxes (other than accrued Income Taxes) and Assumed Intercompany Payables (except for any accounts and notes payable not able to be specifically identified as accounts or notes payable of the Business), and all Liabilities to suppliers for products and services relating to the Business prior to, at or after the Closing, and all Liabilities to customers under purchase orders for products of the Business which at Closing have not yet been provided;

          (e) all Liabilities arising prior to, at or after the Closing under any Contracts that are assigned to Purchaser pursuant to Section 2.2 or Section 2.6 at or subsequent to the Closing;

          (f) all other Liabilities set forth in Schedule 2.4(f) of the Seller Disclosure Letter;

          (g) all Liabilities with respect to Asset Selling Entity Employees (except with respect to any Retention Bonus for such Asset Selling Entity Employees);

          (h) all Liabilities for or with respect to Taxes for which Purchaser bears responsibility pursuant to Article VII; and

          (i) all other Liabilities arising prior to, at or after the Closing relating to the ownership or operation of the Business or the Purchased Assets, including all Liabilities included in the Closing Date Working Capital.

For the avoidance of doubt, the parties acknowledge and agree that Purchaser’s assumption of Liabilities pursuant to this Section 2.4 does not obviate or otherwise affect Purchaser’s ability to make claims hereunder for any breach of Seller’s representations and warranties hereunder.

For the avoidance of doubt, the Assumed Liabilities listed in Sections 2.4(a)-2.4(i) do not include any Liabilities of the Conveyed Companies, which are addressed in Section 2.1.

          Section 2.5 Retained Liabilities of the Business.

          (a) Notwithstanding any provision in this Agreement, Seller or the Asset Selling Entities shall retain and be responsible only for the following liabilities relating to the Business (collectively, the “Retained Liabilities”):

     (i) Liabilities for which any Asset Selling Entity expressly has responsibility pursuant to the terms of this Agreement;

     (ii) Liabilities solely related to the Excluded Assets (other than those contemplated by 2.4(g));

     (iii) intercompany Liabilities of the Asset Selling Entities, other than Assumed Intercompany Payables;

     (iv) any Liabilities of any Asset Selling Entity, Conveyed Company or the Business to pay any Indebtedness incurred prior to the Closing Date;

     (v) all Liabilities for or with respect to Taxes for which Seller bears responsibility pursuant to Article VII;

     (vi) the Liabilities listed in Schedule 2.5(vi) of the Seller Disclosure Letter;

     (vii) the Excluded Environmental Liabilities;

     (viii) the Excluded Employee Liabilities;

     (ix) the Excluded Warranty Obligations;

     (x) all Liabilities relating to any Retention Bonus; and

     (xi) all Liabilities of PT Dulmison Indonesia to the extent arising primarily from the conduct of Seller’s NetConnect business.

          Section 2.6 Consents.

          (a) Notwithstanding anything to the contrary in this Agreement, there shall be excluded from the transactions contemplated by this Agreement any Real Property Lease, Equipment Lease, Intellectual Property License, Permit, Assumed Contract, Contract or right which is not assignable or transferable without the consent of any Person other than the Asset Selling Entities, the Conveyed Companies or any Subsidiary of Seller or Purchaser, to the extent that such consent shall not have been given prior to the Closing; provided, however, that each of the Seller Entities and Purchaser shall have the continuing obligation from the date of this Agreement to use commercially reasonable efforts to obtain all necessary consents to the assignment or transfer thereof, it being understood that neither Seller nor Purchaser nor any of their respective Affiliates shall be required to expend money, commence any litigation or offer or grant any accommodation (financial or otherwise) to any third party to obtain such consents. Upon obtaining the requisite third-party consents thereto, such Real Property Leases, Equipment Leases, Intellectual Property Licenses, Permits, Assumed Contracts, Contracts or rights, if otherwise includable in the Purchased Assets or the transactions contemplated hereby, shall promptly be transferred and assigned to Purchaser hereunder.

          (b) With respect to any Real Property Lease, Equipment Lease, Intellectual Property License, Permit, Assumed Contract, Contract or right that is not included in the Purchased Assets or assigned to Purchaser at the Closing by reason of Section 2.6(a), after the Closing and until any requisite consent is obtained therefor and the same is transferred and assigned to Purchaser, the Parties shall cooperate with each other in endeavoring to obtain for Purchaser, at no cost to any Seller or any of its Affiliates, an arrangement with respect thereto to provide for Purchaser substantially comparable benefits therein, including, in certain circumstances, Purchaser continuing operations in a leased facility prior to obtaining consent to assignment of the lease for such facility. Purchaser agrees to indemnify Seller or any of its Affiliates in respect of all Liabilities of the Seller Entities in respect of any such arrangement, continuing operations and underlying lease, license, Contract, agreement or right.

          (c) Purchaser agrees that neither Seller nor any of its Affiliates shall have any liability whatsoever arising out of or relating to the failure to obtain any consents that may be

required in connection with the transactions contemplated by this Agreement or because of the default under, or acceleration or termination of, any Real Property Lease, Equipment Lease, Intellectual Property License, Permit, Assumed Contract, Contract or right, as a result thereof. For the avoidance of doubt, nothing in this Section 2.6(c) relieves Seller of its obligations in Sections 2.6(a) and 2.6(b).

          Section 2.7 Purchase Price. In consideration of the sale and transfer of the Equity Interests and the Purchased Assets, Purchaser agrees to purchase from the Equity Selling Entities the Equity Interests for an aggregate purchase price of $7,200,000.00 (the “Gross Equity Purchase Price”), and purchase from the Asset Selling Entities the Purchased Assets for an aggregate purchase price of $8,800,000.00 (the “Gross Asset Purchase Price,” and together with the Gross Equity Purchase Price, the “Gross Purchase Price”), plus the assumption by Purchaser of the Assumed Liabilities, subject to adjustment pursuant to Section 2.8 (as so adjusted, the “Aggregate Purchase Price”). The Gross Purchase Price shall be payable as follows:

          (a) At the Closing, Purchaser shall deliver to Seller an amount equal to $7,200,000.00 (the “Equity Closing Payment”) by wire transfer of immediately available funds to the account or accounts previously notified by Seller in writing to Purchaser.

          (b) At the Closing, Purchaser shall deliver to Seller an amount equal to $8,800,000.00 (the “Asset Closing Payment”, and together with the Equity Closing Payment, the “Closing Payment”) by wire transfer of immediately available funds to the account or accounts previously notified by Seller in writing to Purchaser.

          Section 2.8 Purchase Price Adjustment.

          (a) Promptly after the Closing Date, and in any event not later than thirty (30) days following the Closing Date, Seller shall prepare and deliver to Purchaser for its review a statement (the “Closing Statement”) of the Closing Working Capital and the Closing Cash as of the close of business on the Closing Date. The Closing Statement shall be prepared in a manner consistent with Exhibit A. “Closing Working Capital” means, as of the Closing, the Working Capital. Purchaser shall give Seller and its Representatives access to the premises, books and records, and appropriate personnel of the Business, the Conveyed Companies and Purchaser for purposes of the preparation of the Closing Statement in accordance with this Section 2.8(a) (and during the periods contemplated by Section 2.8(b)). Purchaser shall instruct its employees (including the Transferred Employees) and Representatives to cooperate with, and promptly and completely respond to all reasonable requests and inquiries of, Seller and its Representatives, and, upon execution of a customary access letter if required by Purchaser’s outside accountants, Seller and its Representatives shall have reasonable access, upon reasonable notice, to all relevant work papers, schedules, memoranda and other documents prepared by Purchaser or its Representatives (including its outside accountants) to the extent such materials have been prepared by Purchaser or its Representatives and relate to the calculation of Closing Working Capital and/or the Closing Cash in any respect.

          (b) Purchaser and Purchaser’s accountants and financial and other advisors may make reasonable inquiries of Seller and/or Seller’s accountants regarding questions concerning or disagreements with the Closing Statement arising in the course of Purchaser’s review.

Purchaser shall complete its review of the Closing Statement within forty-five (45) days after the delivery thereof to Purchaser. Promptly following completion of its review (but in no event later than the conclusion of the forty-five (45) day period), Purchaser may submit to Seller a letter regarding its concurrence or disagreement with the accuracy of the Closing Statement; provided that any such letter must specify (i) the items of the Closing Statement with which Purchaser disagrees, (ii) the adjustments that Purchaser proposes to be made to the Closing Statement and (iii) the specific amount of such disagreement and all supporting documentation and calculations; and provided, further, that Purchaser may only disagree with the Closing Statement (x) to the extent Purchaser claims Seller did not arithmetically calculate the Closing Statements accurately or did not prepare the Closing Statement in accordance with and in a manner consistent with the policies and principles set forth on Exhibit A and (y) if Purchaser’s proposed calculation will result in an adjustment to the Gross Purchase Price. If Purchaser does not deliver a letter disagreeing with the accuracy of the Closing Statement before the conclusion of such forty-five (45) day period, the Closing Statement shall be final and binding upon the Parties and Purchaser shall be deemed to have agreed with all items and amounts contained in the Closing Statement. If Purchaser does deliver such a letter, following such delivery, Seller and Purchaser shall attempt in good faith to resolve promptly any disagreement as to the computation of any item in the Closing Statement. Any item as to which there is no disagreement shall be deemed agreed. If a resolution of such disagreement has not been effected within fifteen (15) days (or longer, as mutually agreed by the Parties) after delivery of such letter, then Seller and Purchaser shall submit any disagreement regarding the Closing Statement (a “Disputed Item”) to the Accountant for determination. The determination of the Accountant with respect to any Disputed Item shall be completed within thirty (30) days of submission of such Disputed Item to the Accountant and shall be determined in accordance with this Agreement and be final and binding upon Seller and Purchaser. The Accountant shall adopt a position within the range of positions submitted by Seller and Purchaser with respect to any Disputed Item. The Accountant’s determination regarding any Disputed Item shall be based solely on whether Seller included such Disputed Item in or excluded such Disputed Item from the Closing Statement or arithmetically calculated such Disputed Item, as the case may be, accurately and in accordance with and in a manner consistent with the policies and principles set forth on Exhibit A. Closing Working Capital as finally determined in accordance herewith shall be referred to as the “Final Closing Working Capital.” The Closing Cash as finally determined in accordance herewith shall be referred to as the “Closing Cash Amount.” The fees, costs, and expenses of the Accountant shall be shared as follows:

     (i) if the Accountant resolves all of the Disputed Items in favor of Purchaser’s position (the Final Closing Working Capital and/or the Closing Cash Amount, as the case may be, so determined is referred to herein as the “Low Value”), then Seller shall be obligated to pay for all of the fees and expenses of the Accountant;

     (ii) if the Accountant resolves all of the Disputed Items in favor of Seller’s position (the Final Closing Working Capital and/or the Closing Cash Amount, as the case may be, so determined is referred to herein as the “High Value”), then Purchaser shall be obligated to pay for all of the fees and expenses of the Accountant; and

     (iii) if the Accountant neither resolves all of the Disputed Items in favor of Purchaser’s position nor resolves all of the Disputed Items in favor of Seller’s position

(the Final Closing Working Capital and/or the Closing Cash Amount, as the case may be, so determined is referred to herein as the “Actual Value”), Seller shall be responsible for such fraction of the fees and expenses of the Accountant for the Final Closing Working Capital and/or the Closing Cash Amount, as the case may be, equal to (x) the difference between the High Value and the Actual Value over (y) the difference between the High Value and the Low Value, for the Final Closing Working Capital and/or the Closing Cash Amount, as the case may be, and Purchaser shall be responsible for the remainder of the fees and expenses of the Accountant.

          (c) If the Final Closing Working Capital:

     (i) is equal to or greater than an amount $500,000 less than the Target Closing Working Capital (the “Lower Working Capital Limit”) and is equal to or less than an amount $500,000 more than the Target Closing Working Capital (the “Upper Working Capital Limit”), then no adjustments will be made to the Purchase Price in respect of the Final Closing Working Capital;

     (ii) exceeds the Upper Working Capital Limit, then Purchaser shall be obligated to pay to Seller the amount by which the Final Closing Working Capital exceeds the Upper Working Capital Limit; or

     (iii) is less than the Lower Working Capital Limit, then Seller shall be obligated to repay to Purchaser the amount by which the Lower Working Capital Limit exceeds the Final Closing Working Capital.

          (d) Purchaser shall be obligated to pay to Seller the Closing Cash Amount, if any.

          (e) Any payments to be made pursuant to Sections 2.8(c) and (d) shall be made by wire transfer of immediately available funds to the account designated in writing by Purchaser or Seller, as the case may be, within five (5) Business Days after the determination of the Final Closing Working Capital and the Closing Cash Amount, as the case may be. For the avoidance of doubt, if either the Final Closing Working Capital or the Closing Cash Amount, as the case may be, is determined before the other, Purchaser or Seller, as the case may be, shall pay the other party any amount owed pursuant to Section 2.8(c) or (d) in respect of such determination within five (5) Business Days after such determination (notwithstanding that the other has not yet been determined). Any payment made pursuant to Section 2.8(c) or (d) shall be made with interest (such interest to be calculated on the basis of a year of three-hundred sixty (360) days and the actual number of days elapsed) on such amount from (i) the date of the delivery of a letter of disagreement, if there is a disagreement or (ii) 35 days from the Closing if there is no such letter of disagreement, to the date of such payment at a rate equal to eight percent (8%) per annum.

          Section 2.9 Purchase Price Allocation.

          (a) Within twenty (20) Business Days after the Closing Statement becomes final pursuant to Section 2.8(b), Seller shall deliver to Purchaser a statement (the “Allocation”), allocating (i) the Gross Equity Purchase Price (as adjusted pursuant to Section 2.8) among the Equity Interests, and (ii) the sum of (A) the Gross Asset Purchase Price (as adjusted pursuant to

Section 2.8), (B) the Assumed Liabilities, and (C) any other Liabilities properly taken into account pursuant to Section 1060 of the Code among the Purchased Assets, in each case in accordance with Section 1060 of the Code. Each of the Seller Entities on the one hand and Purchaser and the Conveyed Companies on the other shall (x) be bound by the Allocation for purposes of determining any Taxes; (y) prepare and file, and cause its Affiliates to prepare and file, its Tax Returns on a basis consistent with the Allocation and (z) take no position, and cause its Affiliates to take no position, inconsistent with the Allocation on any applicable Tax Return or in any proceeding before any Taxing Authority or otherwise. In the event that the Allocation is disputed by any Taxing Authority, the Party receiving notice of the dispute shall promptly notify the other Party hereto, and Seller and Purchaser agree to use their commercially reasonable efforts to defend such Allocation in any audit or similar proceeding.

          (b) Purchaser shall notify Seller of any disagreement within twenty (20) Business Days of Purchaser’s receipt of the proposed Allocation. If Seller and Purchaser fail to agree on the Allocation within thirty (30) days of Seller’s receipt of Purchaser’s notice of disagreement, such matter shall be referred to a law firm or accounting firm (the “Arbiter”) for binding arbitration. Seller and Purchaser shall mutually agree on an Arbiter that is independent of both Seller and Purchaser. In the event that Seller and Purchaser cannot agree on an Arbiter, Seller and Purchaser each shall select a law firm or an accounting firm, and the two (2) firms selected shall mutually select a third law firm or accounting firm, independent of both Seller and Purchaser, to act as the Arbiter. The choice of an Arbiter by the two (2) firms pursuant to the preceding sentence shall be binding on the Parties. Within thirty (30) days of the selection of the Arbiter, Seller and Purchaser shall deliver to the Arbiter copies of any schedules or documentation which may reasonably be required by the Arbiter to make its determination. Each of Purchaser and Seller shall be entitled to submit to the Arbiter a memorandum setting forth its position with respect to such arbitration. The Arbiter shall render a determination within sixty (60) days of its selection. Notwithstanding any provision of this Section 2.9(b), the Arbiter may, at its sole discretion, amend the procedures contained herein. The determination of the Arbiter shall be final and binding on all Parties and shall be the conclusive “Allocation” for purposes of this Agreement. The costs incurred in retaining the Arbiter shall be shared equally, fifty percent (50%) by Seller and fifty percent (50%) by Purchaser.

          Section 2.10 Closing.

          (a) The Closing shall take place at the offices of Seller, located at 1050 Westlakes Drive, Berwyn, Pennsylvania 19312, at 10:00 A.M., Eastern Time on the third (3rd) Business Day following the satisfaction or waiver of the conditions precedent specified in Article VI (other than the conditions to be satisfied on the Closing Date, but subject to the waiver or satisfaction of such conditions) or at such other times and places as the Parties may mutually agree. The date on which the Closing occurs is called the “Closing Date.” The Closing shall be deemed to occur and be effective as of 11:59 P.M., Eastern Time on the Closing Date (the “Effective Time”).

          (b) At the Closing, Purchaser shall deliver or cause to be delivered to Seller (i) the Closing Payment by wire transfer of immediately available funds to an account or accounts specified by Seller, (ii) the officer’s certificates referenced in Section 6.3(c), (iii) a counterpart of the Transition Services Agreement, duly executed by an authorized officer of Purchaser, and (iv)

the duly-executed counterparts of Purchaser and its Affiliates, as applicable, of each document effecting the transfer of the Purchased Assets and the assumption of the Assumed Liabilities as the parties may reasonably agree.

          (c) At the Closing, Seller shall deliver or cause to be delivered to Purchaser (i) all certificates (if any) representing the Equity Interests, (ii) the officer’s certificates referenced in Section 6.2(d) (iii) a counterpart of the Transition Services Agreement, duly executed by an authorized officer of Seller, and (iv) the duly-executed counterparts of Seller and its Affiliates, as applicable, to each document effecting the transfer of the Purchased Assets and the assumption of the Assumed Liabilities as the parties may reasonably agree.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

          Except as set forth in the letter (the “Seller Disclosure Letter”) delivered by Seller to Purchaser concurrently with the execution of this Agreement (it being understood that any matter disclosed on any Schedule of the Seller Disclosure Letter will be deemed to be disclosed on any other Schedule of the Seller Disclosure Letter where it is reasonably apparent from the face of such disclosure that such information applies to such other sections), Seller hereby represents and warrants to Purchaser as follows:

          Section 3.1 Organization and Qualification. Seller is a corporation duly organized and validly existing under the Laws of Luxembourg. Each Equity Selling Entity and Asset Selling Entity is a corporation or a limited liability company duly organized, validly existing and, where applicable, in good standing under the Laws of the jurisdiction of its organization.

          Section 3.2 Corporate Authority; Binding Effect.

          (a) Seller has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. At Closing, each Seller Entity will have all requisite authority to execute and deliver each document, agreement or instrument to be executed and delivered pursuant to this Agreement. The execution and delivery by Seller and each Seller Entity, as applicable, of this Agreement and each other document, agreement or instrument to be executed and delivered by Seller and each Seller Entity pursuant to this Agreement, and the performance by Seller and each Seller Entity of its obligations hereunder and thereunder, have been, or will have been at the Closing, duly authorized by all requisite corporate action on the part of Seller and each Seller Entity.

          (b) This Agreement, when executed and delivered by Seller, assuming due execution and delivery hereof by Purchaser, constitutes the valid and binding obligations of Seller, enforceable against Seller in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar Laws affecting creditors’ rights generally or by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

          Section 3.3 Conveyed Companies; Capital Structure.

          (a) Each of the Conveyed Companies is duly organized, validly existing and, where applicable, in good standing under the Laws of its jurisdiction of organization, except in jurisdictions where there is no legal concept of “Good Standing”, or where the failure to be in good standing would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, with the corporate power and authority to own and operate the Business, its properties and assets and to carry on its business as currently conducted. Each of the Conveyed Companies is duly qualified to do business in each jurisdiction where the nature of its business or properties makes such qualification necessary, except in jurisdictions where the failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

          (b) Schedule 3.3(b) of the Seller Disclosure Letter sets forth the authorized capitalization of the Conveyed Companies and the number of shares of each class of capital stock or other equity interests in each such Conveyed Company, which are (to the extent applicable) validly issued and outstanding, fully paid and non-assessable. There are no outstanding warrants, options, agreements, subscriptions, convertible or exchangeable securities or other Contracts pursuant to which any of the Conveyed Companies is or may become obligated to issue, sell, purchase, return, reduce or redeem any shares of capital stock or other securities or other equity interests of the Conveyed Companies, and no equity securities or other equity interests of any of the Conveyed Companies are reserved for issuance for any purpose. The Equity Selling Entities own of record and with full legal title the outstanding issued and paid-up Equity Interests as indicated on Schedule 3.3(b) of the Seller Disclosure Letter, free and clear of all Liens and control absolutely the right to exercise all rights and powers attached to the respective Equity Interests pursuant to applicable Laws including, without limitation, the right to vote at any meeting.

          Section 3.4 Non-Contravention. The execution, delivery and performance of this Agreement by Seller, and the consummation of the transactions contemplated hereby, do not and will not (i) violate any provision of the certificate of incorporation, bylaws or comparable organizational document of Seller or any of the Equity Selling Entities, the Asset Selling Entities or the Conveyed Companies, as applicable; (ii) subject to obtaining the consents referred to in Schedule 3.4 of the Seller Disclosure Letter, conflict with, result in a breach of, constitute a default under, or result in the termination, cancellation or acceleration (whether after the giving of notice or the lapse of time or both) of any material right or obligation of the Seller Entities or the Conveyed Companies under, or to a loss of any material benefit of the Business to which the Seller Entities or the Conveyed Companies are entitled under, any Material Contract, Real Property Lease or material license of Transferred Intellectual Property or (iii) assuming the accuracy of Section 4.3, violate materially or result in a material breach of or constitute a material default under any Law or other restriction of any Governmental Authority to which any Seller Entity or Conveyed Company is subject.

          Section 3.5 Permits. Except as set forth in Schedule 3.5 of the Seller Disclosure Latter, the execution, delivery and performance by Seller of this Agreement and each other document, agreement or instrument to be executed and delivered by Seller or any Seller Entity pursuant to this Agreement do not require any material Permits.

          Section 3.6 Absence of Certain Changes. Except as set forth on Schedule 3.6 of the Seller Disclosure Letter, since June 26, 2009 to the date of this Agreement: (i) the Business has been conducted in all material respects in the ordinary course; and (ii) there has not occurred a Material Adverse Effect.

          Section 3.7 No Litigation. Except as set forth on Schedule 3.7 of the Seller Disclosure Letter, there is no material action, Order outstanding, suit, judgment, injunction, litigation, legal proceeding, investigation or arbitration pending or, to the Knowledge of Seller, threatened in writing, by or before any Governmental Authority or arbitrator against (a) Seller or any Asset Selling Entity related to the Business or (b) any Conveyed Company.

          Section 3.8 Compliance with Laws. To the Knowledge of Seller:

          (a) except as set forth on Schedule 3.8(a) of the Seller Disclosure Letter, each Seller Entity and each Conveyed Company is in compliance in all material respects with all Laws applicable to the ownership or operation of the Business, and

          (b) each Seller Entity and each Conveyed Company possesses all material Permits necessary for the conduct of the Business as it is currently conducted.

          Section 3.9 Environmental Matters.

          (a) The Conveyed Companies are, and at all times in the past five years have been, in compliance in all material respects with all applicable Environmental Laws and there are no claims, encumbrances, proceedings, investigations or actions by any Governmental Authority or other Person pending or to the Knowledge of Seller threatened, in connection with the operation of the Conveyed Companies under any applicable Environmental Law.

          (b) Seller has delivered or made available to Purchaser true, correct and complete copies of all reports, investigations, evaluations, assessments, monitoring, memoranda, data and other documents or files that to the Knowledge of Seller exist and are in the possession of Seller, any Seller Entity or Seller’s or Seller’s Entity’s agents or consultants that relate to any material aspect of the environmental condition of the Conveyed Companies or any real property formerly owned or leased by any Conveyed Company.

          (c) The Conveyed Companies have not either expressly or by operation of Law assumed or undertaken any material liability under any Environmental Law, including without limitation any obligation for corrective or remedial action or any other action under any Environmental Law.

          (d) Except as permitted by applicable Environmental Law, there has been no Release of Hazardous Materials by any Conveyed Company, or to the Knowledge of Seller, by any other Person, at, on or under any real property either formerly or currently leased, owned or operated by any Conveyed Company.

          (e) Except as listed on Schedule 3.9(e) of the Seller Disclosure Letter, to the Knowledge of Seller, there are no underground storage tanks, asbestos-containing materials in any form or condition, materials or equipment containing polychlorinated biphenyls or any

landfills, surface impoundments, or other disposal areas present on any real property currently leased or owned by any Conveyed Company.

          (f) Other than as set forth in this Section 3.9, Seller does not make any representation or warranty with respect to environmental matters.

          Section 3.10 Material Contracts.

          (a) Schedule 3.10 of the Seller Disclosure Letter sets forth as of the date hereof a list of the following Contracts that relate primarily to the Business to which a Seller Entity, Conveyed Company or any Affiliate of any thereof is a party (collectively, the “Material Contracts”), true and complete (in all material respects) copies of which Seller has made available to Purchaser prior to the execution hereof:

     (i) each Equipment Lease which entails rental payments in excess of $100,000 per annum or $500,000 in the aggregate;

     (ii) each Contract for goods and/or services between (a) any Seller Entity or Conveyed Company on the one hand, and any other Seller Entity, Conveyed Company or any Affiliate of any thereof, on the other hand or (b) Seller and/or any of its Affiliates (other than the Conveyed Companies) or any of the officers or directors of Seller and/or any of its Affiliates (other than the Conveyed Companies), on the one hand, and any Seller Entity and/or Conveyed Company, on the other hand;

     (iii) each mortgage, indenture, security agreement, pledge, note, loan agreement or guarantee (excluding items set forth in Schedule 3.13(a) of the Seller Disclosure Letter) in respect of Indebtedness in excess of $100,000;

     (iv) each customer Contract that resulted in payment in excess of $500,000 in the 2009 Fiscal Year or is expected to result in payment in excess of $1,000,000 in the aggregate within Seller’s fiscal years 2010 and 2011, to the applicable Seller Entity or Conveyed Company, respectively;

     (v) each outstanding Contract with vendors of the Business that resulted in payment in excess of $500,000 in the 2009 Fiscal Year or is expected to result in payment in excess of $1,000,000 in the aggregate within Seller’s fiscal years 2010 and 2011 by the applicable Seller Entity or Conveyed Company, respectively;

     (vi) each Contract materially limiting the ability of the applicable (A) Asset Selling Entity (or following the Closing, the Business) to compete with any Person in connection with such entity’s conduct of the Business or (B) Conveyed Company to compete with any Person in connection with such entity’s conduct of the Business;

     (vii) each material Contract regarding the formation or participation in an equity joint venture with a third party;

     (viii) each Contract pursuant to which any Seller Entity or Conveyed Company (as licensor or licensee) licenses any Intellectual Property material to the Business

(excluding licenses for commercial off-the-shelf computer software that are generally available and which have an acquisition cost of $100,000 or less);

     (ix) collective bargaining or other labor or union Contracts, or any contract with any Business Employees;

     (x) material sales representative contracts and material powers of attorney;

     (xi) each outstanding purchase order from a customer on the back-log report as of September 25, 2009 with a back-log amount in excess of $500,000 (each a “Material Purchase Order”); and

     (xii) any other Contract or purchase order that, to the Knowledge of Seller, is material to the operation of the Business and does not fall into any of the categories above in Section 3.10.

          (b) Other than those identified in Section 3.10(a)(xi) or any purchase order identified in Section 3.10(a)(xii), each Material Contract is in full force and effect.

          (c) There exists no default or event of default by the applicable Asset Selling Entity or Conveyed Company or, to the Knowledge of Seller, any other party to any such Contract or purchase order, with respect to any material term or provision of any Material Contract, any Material Purchase Order or any purchase order identified in Section 3.10(a)(xii).

          Section 3.11 Intellectual Property.

          (a) The applicable Asset Selling Entity or Conveyed Company owns or has the right to use, transfer or assign, free and clear of all Liens other than Permitted Liens, all of the Transferred Intellectual Property. Except as set forth on Schedule 3.11(a) of the Seller Disclosure Letter, there is no claim, demand or proceeding pending against, or, to the Knowledge of Seller, threatened in writing against, any Seller Entity or Conveyed Company which challenges the rights of the Asset Selling Entities or Conveyed Companies in respect of the Transferred Intellectual Property.

          (b) Except as set forth in Schedule 3.11(b) of the Seller Disclosure Letter, to the Knowledge of Seller, the conduct of the Business does not infringe, misappropriate, misuse or violate any Intellectual Property (other than Transferred Intellectual Property) of any Seller Entity, or any Intellectual Property of any other Person, and no Person is infringing the Transferred Intellectual Property.

          (c) Other than Intellectual Property included in the Excluded Assets, the Transferred Intellectual Property and any other Intellectual Property rights granted to Purchaser pursuant to this Agreement, include all of the Intellectual Property owned by Seller or any of its Affiliates that is necessary to conduct the Business in all material respects as currently conducted.

          Section 3.12 Real Property.

          (a) Schedule 3.12(a) of the Seller Disclosure Letter sets forth a list as of the date hereof of all of the real property owned by any of the Asset Selling Entities and the Conveyed Companies used primarily in the Business (collectively, the “Real Property”). An Asset Selling Entity or a Conveyed Company has title in fee simple (or its equivalent under applicable Law) to the Real Property, free and clear of all Liens, other than Permitted Liens and Liens that will be released at or prior to the Closing.

          (b) To the Knowledge of Seller, the Real Property is in compliance in all material respects with all Laws, covenants, conditions, easements, use and occupancy restrictions to which it is subject.

          (c) Schedule 3.12(c) of the Seller Disclosure Letter together sets forth a list as of the date hereof of each real property lease and all leasehold interests (including any prepaid rent, security deposits or options to renew or purchase in connection therewith) in real property of the Conveyed Companies, in each case used in the Business (collectively, the “Real Property Leases”). A list of all Real Property Leases is set forth on Schedule 3.12(c) of the Seller Disclosure Letter and true and complete copies thereof have been made available to Purchaser. Each Real Property Lease is in full force and effect and there exists no material default or material event of default by the applicable Conveyed Company or, to the Knowledge of Seller, any other party to any such Real Property Lease.

          (d) Except as set forth on Schedule 3.12(d) of the Seller Disclosure Letter, to the Knowledge of Seller, there are no material structural defects or material defects in the mechanical or building systems in any facility located on the Real Property.

          (e) Except as set forth on Schedule 3.12(e), the Real Property is neither leased nor occupied, individually or jointly, by any Person other than an Asset Selling Entity, a Conveyed Company, or an Affiliate of either, as applicable. Neither Seller nor any Selling Entity or Conveyed Company have received any notice of any violation of any Laws, any applicable zoning ordinance, covenant, condition, easement, building code, use or occupancy restriction, or default under any occupancy agreements with respect to the Real Property; and to the Knowledge of Seller, there is no existing condition or circumstance which, with the giving of notice or the passage of time or both, would constitute or result in any such violation or default.

          (f) Except as set forth on Schedule 3.12(f), there are no existing property Tax abatement programs or other governmental assistance programs with respect to the Real Property.

          (g) There is no pending, and neither Seller nor any Selling Entity or Conveyed Company has received written notice of any threatened condemnation, expropriation, eminent domain, special assessment or similar proceeding affecting any of the Real Property. There is no pending, and neither Seller nor any Selling Entity or Conveyed Company has received written notice of any threatened fire, health, safety, building, environmental, Hazardous Substances, pollution control, zoning or other land use regulatory proceedings which would have a material

and adverse effect on the use and operation of any portion of the Real Property for its intended purpose or the value of any material portion of the Real Property.

          (h) Seller has made available to Purchaser copies of any and all title policy and underlying title documents, surveys, engineering and geologic reports, maintenance reports and environmental reports in its possession with respect to the Real Property.

          (i) All public utilities necessary for the operation of the Business as currently conducted are installed and operating, and all installation and connection charges with respect to the Real Property that are due and payable by Seller, Selling Entities or the Conveyed Companies, as applicable, have been paid in full.

          Section 3.13 Employee Benefit Plans.

          (a) Each material Benefit Plan that is maintained or sponsored by an Asset Selling Entity and related to a Business Employee or a Conveyed Company is listed on Schedule 3.13(a) of the Seller Disclosure Letter.

          (b) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and whenever applicable according to the Laws and regulations of the respective country: (i) each Benefit Plan that is maintained by a Conveyed Company which is intended to be “qualified” within the meaning of Section 401(a) of the Code (or such other analogous Law of the respective country in which such plan is maintained) has received a favorable determination letter from the IRS or analogous non-U.S. Governmental Authority (or has submitted, or is within the remedial amendment period for submitting, an application for a determination letter with the IRS or analogous non-U.S. Governmental Authority and is awaiting receipt of a response) and, to the Knowledge of Seller, no event has occurred and no condition exists as of the date hereof which could reasonably be expected to result in the revocation of any such determination; and (ii) to the Knowledge of Seller, no claim, action or litigation has been made or commenced with respect to any Benefit Plan that is maintained by a Conveyed Company (other than routine claims for benefits payable in the ordinary course, and appeals of such denied claims). Each Benefit Plan that is maintained by a Conveyed Company has been administered, in all material respects, in accordance with its terms and ERISA, the Code, and other applicable Law. Each Benefit Plan has, in all material respects, been established, funded, maintained and administered in compliance with its terms and with the applicable provisions of ERISA, the Code and all other applicable Laws.

          (c) Each Asset Selling Entity and Conveyed Company has paid and discharged all of its Liabilities arising under ERISA, the Code or, as applicable, the Laws and regulations of the respective countries, of a character which, if unpaid or unperformed, would result in the imposition of a Lien against the properties or assets of the Business or result in a governmental enforcement action involving fines or penalties.

          (d) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event): (i) cause or result in the accelerated vesting, funding or delivery of, or increase the amount or value of any benefit under any Benefit Plan listed on Schedule 3.13(a) of the Seller

Disclosure Letter, or (ii) cause or result in the funding of any Benefit Plan listed on Schedule 3.13(a) of the Seller Disclosure Letter.

          (e) Seller does not maintain any defined benefit pension plan applicable to Business Employees other than its participation in or contribution to statutory pension, retirement or other social plans mandated or made available under applicable Law.

          (f) Other than as set forth in this Section 3.13, Seller does not make any representation or warranty with respect to employee benefit plan matters.

          Section 3.14 Labor and Employment Matters.

          (a) Each Asset Selling Entity and each Conveyed Company is in compliance in all material respects with all applicable Laws applicable to the ownership and operation of the Business respecting employment and employment practices, terms and conditions of employment and wages and hours, and is not engaged in any unfair labor practice.

          (b) No unfair labor practice complaint against any Asset Selling Entity or Conveyed Company or any of their representatives or employees in connection with the Business is pending before the National Labor Relations Board or any corresponding non-U.S. labor authority.

          (c) There is no material labor strike, dispute, slowdown or stoppage actually pending, or to the Knowledge of Seller, threatened in writing, against Seller, any Seller Entity or Conveyed Company involving the Business.

          (d) Schedule 3.14(d) of the Seller Disclosure Letter sets forth, as of the date hereof, a list of all collective bargaining and labor union or similar agreements applicable to any Business Employee. No union is currently certified, and there is no union representation question and no union or other organizational activity that would be subject to the National Labor Relations Act (20 U.S.C. §151 et. seq.) or similar Law existing or, to the Knowledge of Seller, threatened in writing, with respect to the operations of the Business.

          (e) No material grievance exists or, to the Knowledge of Seller, is threatened in writing, and no material arbitration proceeding arising out of or under any collective bargaining or similar agreement of any Asset Selling Entity or Conveyed Company is pending. There are no material actions, suits, claims, charges or pending matters relating to any employment, safety or discrimination matters involving any Business Employees.

          (f) The representations and warranties in this Section 3.14 are the sole and exclusive representations and warranties of Seller concerning labor and employment matters.

          Section 3.15 Taxes.

          (a) Seller has paid or has caused to be paid, or will pay or will cause to be paid (including by Purchaser pursuant to Section 7.1), all material Taxes imposed on the Purchased Assets that have become due and payable on or before the Closing Date, except Taxes being

contested in good faith as set forth in Schedule 3.15(a) of the Seller Disclosure Letter and Taxes assumed by Purchaser under this Agreement.

          (b) Seller has timely filed or has caused to be filed, or will file or will cause to be filed, all material Tax Returns required to be filed on or before the Closing Date with respect to the Conveyed Companies, and all Taxes reflected on such Tax Returns have been or will be paid when due except for (i) Taxes not then due and payable, (ii) Taxes otherwise being contested in good faith as set forth in Schedule 3.15(b) of the Seller Disclosure Letter and (iii) Taxes assumed by Purchaser under this Agreement.

          (c) To the Knowledge of Seller: (i) each Conveyed Company has complied in all material respects with the provisions of applicable Law relating to the withholding and payment of Taxes, (ii) since December 31, 2005, none of the Conveyed Companies has agreed to any adjustment under either Section 481(a) or Section 482 of the Code or an analogous provision of applicable Law by reason of a change in accounting method or otherwise, (iii) none of the Conveyed Companies is or has been a “United States Real Property Holding Corporation” within the meaning of Section 897 of the Code, (iv) none of the Conveyed Companies is a “controlled foreign corporation” within the meaning of Section 957 of the Code, and (v) none of the Conveyed Companies has made an election under Treas. Reg. Section 301.7701-3 to be treated as a disregarded entity or as a partnership for U.S. federal income tax purposes.

          (d) Other than as set forth in this Section 3.15, Seller does not make any representation or warranty with respect to Tax matters.

          Section 3.16 Financial Disclosures; No Undisclosed Liabilities.

          (a) The unaudited statements of operations of the Business for the nine months ended June 30, 2009, copies of which are set forth on Schedule 3.16(a)(i) of the Seller Disclosure Letter (the “Financial Disclosures”), fairly present, in conformity with Seller’s accounting policies applied on a consistent basis, the results of operations of the Business for the period then ended. For purposes of this Agreement, the Financial Disclosures are in accordance with GAAP except for the principal items of difference set forth in Schedule 3.16(a)(ii).

          (b) The Asset Selling Entities and Conveyed Companies, taken together, and the Business does not have any obligations or Liabilities (whether accrued, absolute, contingent or otherwise) that are required to be set forth on a consolidated balance sheet prepared in accordance with GAAP, except (i) Liabilities included in Closing Working Capital, (ii) Liabilities incurred in the ordinary course of business after June 30, 2009 which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) Liabilities incurred in connection with the transactions contemplated hereby, (iv) Excluded Liabilities, (v) Liabilities arising from performance obligations under any Contract or Real Property Lease or outstanding purchase order arising in the ordinary course of business and (vi) obligations or Liabilities that may be required by GAAP to be disclosed in footnotes. For the avoidance of doubt, this Section 3.16(b) does not address any matters specifically addressed elsewhere in Article 3.

          Section 3.17 Receivables; Customers.

          (a) Schedule 3.17(a) of the Seller Disclosure Letter provides an accurate and complete breakdown and aging of all Accounts Receivable conveyed to Purchaser hereunder (either directly or through the conveyance of any Conveyed Company) as of June 26, 2009. All existing Accounts Receivable of the Business conveyed to Purchaser hereunder represent valid obligations of customers of the Business.

          (b) As of the date hereof, neither Seller, any Seller Entity nor any Conveyed Company has received, and to the Knowledge of Seller there has not been, any notice indicating that any material customer or material vendor of the Business intends to cease dealing or materially reduce its dealings with Seller or the Seller Entities. To the Knowledge of Seller, there is no contest, claim, or right of set-off, other than returns in the ordinary course of business, under any Contract with any obligor of an Account Receivable conveyed to Purchaser hereunder relating to the amount or validity of such Account Receivable.

          Section 3.18 Inventory. With respect to the Inventory of the Business (including Purchased Assets and Inventory owned by any Conveyed Company): (i) such Inventory was acquired, manufactured, assembled or otherwise obtained in the ordinary course of business; (ii) except to the extent of any excess or obsolescence reserves included in Closing Working Capital, such Inventory is not obsolete, defective, excess or otherwise unmerchantable; and (iii) since June 26, 2009, there has been no material write-down of the value of Inventory except as charged against reserves and reflected on Exhibit A.

          Section 3.19 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller or any Seller Entity or Conveyed Company.

          Section 3.20 Title to Purchased Assets; Sufficiency. The Equity Selling Entities own the Equity Interests free and clear of all Liens. Each Conveyed Company owns the assets owned by it free and clear of all Liens except Permitted Liens, and each Asset Selling Entity owns the Purchased Assets owned by it free and clear of all Liens except Permitted Liens. The Purchased Assets and the assets owned by the Conveyed Companies, taken together are sufficient in all material respects for the conduct of the Business conducted as of the date hereof (except for the conduct of the Business related to (i) the Excluded Assets, (ii) shared services utilized both by the Business and the other businesses of Seller and its Affiliates in the categories listed on Schedule 3.20 of the Seller Disclosure Letter and (iii) the Intellectual Property that is governed by Section 5.9(a). Nothing in this Section 3.20 shall be deemed to constitute a representation or warranty as to the adequacy of the amounts of working capital, including cash, of the Business as of the Closing or the availability of the same.

          Section 3.21 Absence of Certain Business Practices. Neither Seller, nor any Seller Entity or Conveyed Company, nor any of their respective officers, directors, employees, agents or representatives has made, directly or indirectly, with respect to Seller, the Seller Entities, the Conveyed Companies or any of their business activities or the Business, any bribes or kickbacks, illegal political contributions, payments from corporate funds not recorded on the

books and records of Seller, the Seller Entities, or the Conveyed Companies, or payments from corporate funds to governmental officials in their individual capacities, for the purpose of affecting their action or the action of the government they represent, to obtain favorable treatment in securing business or licenses or to obtain special concessions.

          Section 3.22 Insurance. Schedule 3.22(a) of the Seller Disclosure Letter sets forth complete and accurate summaries of all claims related to the Business reported during the past three (3) years under any property/casualty insurance policy, including a claims loss history, the amount of any reserve for open claims, the nature of the claim and whether open or closed. Schedule 3.22(b) of the Seller Disclosure Letter sets forth a summary of the property/casualty insurance policies of Seller related to the Business. As of the date hereof, no insurer has advised Seller, any Seller Entity or any Conveyed Company that it intends to reduce coverage or fail to renew any policy listed on Schedule 3.22(b) of the Seller Disclosure Letter.

          Section 3.23 No Heliform Product Manufacturing in India. The equipment that was previously utilized by the Business to manufacture heliform products in India is currently utilized by the Business to make such products in Thailand or has otherwise been disposed of or re-tooled so that it is no longer capable of making heliform products.

          Section 3.24 Exclusivity of Representations. The representations and warranties made by Seller in this Article III are the exclusive representations and warranties made by Seller with respect to the Conveyed Companies, the Seller Entities, the Business, the Purchased Assets and the Assumed Liabilities. Seller hereby disclaims any other express or implied representations or warranties with respect to the Conveyed Companies, the Asset Selling Entities, any of their respective Affiliates, the Business, the Purchased Assets and the Assumed Liabilities.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

          Purchaser hereby represents and warrants to Seller as follows:

          Section 4.1 Organization and Qualification. Purchaser is a corporation duly organized, validly existing and in good standing under the Laws of the state of Ohio.

          Section 4.2 Corporate Authority.

          (a) Purchaser has all requisite corporate power and authority to execute and deliver this Agreement, and to perform its obligations hereunder. The execution and delivery by Purchaser of this Agreement and each other document, agreement or instrument to be executed and delivered by Purchaser pursuant to this Agreement, and the performance by Purchaser of its obligations hereunder and thereunder, have been, or will have been at the Closing, duly authorized by all requisite corporate action on the part of Purchaser.

          (b) This Agreement, assuming due execution and delivery hereof by Seller, constitutes the valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with its terms, except as such enforcement may be limited by bankruptcy,

insolvency, reorganization, fraudulent conveyance, moratorium or similar Laws affecting creditors’ rights generally or by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

          Section 4.3 Non-Contravention. The execution, delivery and performance by Purchaser of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not (i) violate any provision of the certificate of incorporation, bylaws or other comparable organizational document of Purchaser; (ii) conflict with, or result in a breach of, constitute a default under, result in the termination, cancellation or acceleration (whether after the giving of notice or the lapse of time or both) of any material right or obligation of Purchaser under, or to a loss of any material benefit of Purchaser to which Purchaser is entitled under, any Contract to which Purchaser is a party or by which any of its assets are bound, lease of real estate or license of Intellectual Property to which Purchaser and any of its Affiliates is a party or is subject and (iii) assuming the accuracy of Section 3.4, materially violate or result in a material breach of or constitute a default under any Law or other restriction of any Governmental Authority to which Purchaser is subject.

          Section 4.4 Permits. The execution and delivery by Purchaser of this Agreement and each other document, agreement or instrument to be executed and delivered by Purchaser pursuant to this Agreement do not require any material Permits.

          Section 4.5 Third-Party Approvals. The execution, delivery and performance by Purchaser of this Agreement and each other document, agreement or instrument to be executed and delivered by Purchaser pursuant to this Agreement, and the transactions contemplated hereby and thereby, do not require any material consents, waivers, authorizations or approvals of, or filings with, any third Persons which have not been obtained or effected by Purchaser.

          Section 4.6 Financial Capability. As of the date hereof and on the Closing Date, Purchaser has and will have sufficient funds to pay the Aggregate Purchase Price and to perform and discharge all of its other obligations hereunder, on the terms and conditions provided in or contemplated by this Agreement.

          Section 4.7 Securities Act. Purchaser is acquiring the Equity Interests solely for the purpose of investment and not with a view to, or for sale in connection with, any distribution thereof. Purchaser acknowledges that the Equity Interests are not registered under the Securities Act, any applicable state securities Laws or any applicable foreign securities Laws, and that such Equity Interests may not be transferred or sold except pursuant to the registration provisions of the Securities Act or applicable foreign securities Laws or pursuant to an applicable exemption therefrom and pursuant to applicable state securities Laws. Purchaser (either alone or together with its advisors) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Equity Interests and is capable of bearing the economic risks of such investment.

          Section 4.8 Investigation by Purchaser; Seller’s Liability.  Purchaser has conducted its own independent investigation, verification, review and analysis of the operations, assets, liabilities, results of operations, financial condition, technology and the probable success

or profitability of the ownership, use or operation of the Business, the Conveyed Companies and the Purchased Assets by Purchaser after the Closing, which investigation, review and analysis was conducted by Purchaser and, to the extent Purchaser deemed appropriate, by its Affiliates and the Purchaser Representatives. Purchaser has selected and been represented by, and/or consulted with, such expert advisors as it has deemed appropriate in connection with the negotiation of this Agreement and its determination to enter into and consummate the transactions contemplated hereby. In entering into this Agreement, Purchaser acknowledges that it has relied solely upon the aforementioned investigation, review and analysis and not on any factual representations or opinions of Seller or the Seller Entities and Conveyed Companies or any of Seller’s or its Affiliates’ Representatives or any due diligence materials (except the representations and warranties of Seller set forth in Article III).

          Section 4.9 No Litigation. There is no material action, Order outstanding, suit, litigation, legal proceeding or arbitration pending or, to the knowledge of Purchaser, threatened in writing, against Purchaser or any of its Affiliates by or before any Governmental Authority or arbitrator which would reasonably be expected to delay or prevent the consummation of the transactions contemplated by this Agreement.

          Section 4.10 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee, commission or expenses in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser.

          Section 4.11 Solvency. Purchaser is not entering into the transactions contemplated hereby with actual intent to hinder, delay or defraud either present or future creditors. Immediately after giving effect to the transactions contemplated hereby and assuming the accuracy of the representations and warranties set forth in Article III herein, Purchaser and its Subsidiaries will be Solvent and will have adequate capital to carry on their respective businesses.

          Section 4.12 Confidentiality Agreement. Purchaser and its Affiliates that are subject to the terms of the Confidentiality Agreement and the Purchaser Representatives have complied in all material respects with the terms of the Confidentiality Agreement including the restrictions on contacting other potential acquirers of the Business and the restriction on limiting Purchaser’s financing sources from providing financing to, or arranging financing for, any other potential acquirer of the Business.

          Section 4.13 Absence of Arrangements with Management. Except for employment contracts to be effective after Closing, there are no Contracts, undertakings, commitments, agreements or obligations or understandings between Purchaser or any of its Affiliates, on the one hand, and any member of the management of the Business, on the other hand, relating to the transactions contemplated by this Agreement or the operation of the Business after the Closing.

ARTICLE V

COVENANTS

          Section 5.1 Information and Documents.

          (a) From and after the date hereof and prior to the Closing, subject to applicable Law and any applicable Order, upon reasonable advance notice to Seller, Seller shall permit Purchaser and its Representatives to have supervised, reasonable access, during regular normal business hours, to the Business Employees, the employees of Seller or one of its Affiliates with knowledge of the Business and to the assets, books properties and records of the Seller Entities and the Conveyed Companies relating primarily to the Business, and shall make available to Purchaser such financial and operating data and other available information with respect to the Business as Purchaser shall from time to time reasonably request; provided, however, that no such access shall unreasonably interfere with the Seller Entities’ or the Conveyed Companies’ operation of their respective businesses, including the Business; and provided, further, that neither Seller nor its Affiliates shall be required to take any action which would constitute a waiver of attorney-client privilege.

          (b) All information received by Purchaser and given by or on behalf of the Seller Entities and the Conveyed Companies in connection with this Agreement and the transactions contemplated hereby will be held by Purchaser and its Affiliates and Representatives as “Evaluation Material”, as defined in, and pursuant to the terms of, the Confidentiality Agreement.

          (c) It is expressly understood and agreed that, without the prior written consent of Seller, which consent may be granted or withheld in Seller’s sole and absolute discretion, nothing in this Agreement shall be construed to grant Purchaser the right to perform any Phase I, Phase II or other environmental testing on any of the properties of the Asset Selling Entities or the Conveyed Companies.

          Section 5.2 Conduct of Business.

          (a) From and after the date hereof to the earlier of (i) the termination of this Agreement and (ii) the Closing Date, except (A) as otherwise contemplated, permitted or required by this Agreement, (B) as Purchaser shall otherwise consent in writing (for purposes of this Section 5.2(a), such consent may be given by e-mail and shall be effective upon receipt by Seller), which consent shall not be unreasonably withheld, delayed or conditioned or (C) as may be necessary or advisable, in the sole discretion of Seller, to remove any Excluded Assets from any Conveyed Company, Seller covenants and agrees that it shall cause the officers of each Asset Selling Entity and each Conveyed Company, in each case with respect to the Business, to operate the Business in the ordinary course consistent with past practices, including without limitation:

     (i) not sell, lease, license, abandon or otherwise dispose of any material assets used in the Business, except (A) in the ordinary course of the Business, (B) to another

Conveyed Company or Asset Selling Entity (so long as the assets remain included in the Purchased Assets or in a Conveyed Company) or (C) except as contemplated hereby;

     (ii) not increase or enhance the compensation or benefits of the Business Employees other than in the ordinary course of the Business, as required by applicable Law or pursuant to the terms of any Contract as in effect on the date hereof;

     (iii) not change, amend or restate the charter, certificate of formation or incorporation, operating agreement or bylaws (or other comparable organizational or governing documents) of any Conveyed Company;

     (iv) not authorize for issuance, issue, sell or deliver or agree or commit to issue, sell or deliver (A) any capital stock of, or other equity or voting interest in, any Conveyed Company or (B) any securities convertible into, exchangeable for or evidencing the right to subscribe for or acquire either (1) any capital stock of, or other equity or voting interest in, any Conveyed Company or (2) any securities convertible into, exchangeable for or evidencing the right to subscribe for or acquire, any shares of the capital stock of, or other equity or voting interest in, any Conveyed Company;

     (v) not write-off as uncollectible any notes or Accounts Receivable of the Business, except any write-off of such notes and Accounts Receivable that are fully reserved for in a manner consistent with the policies and principles set forth on Exhibit A;

     (vi) not split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock or its other securities;

     (vii) not (A) incur any Indebtedness, other than short-term Indebtedness or by borrowings under existing credit facilities, or (B) make any loans or advances to any other Person, other than routine advances to employees in the ordinary course of the Business;

     (viii) other than in the ordinary course of business, not (A) make any material Tax election not required by Law that would have a continuing effect on the Conveyed Companies following the Closing Date or (B) settle or compromise any material Tax liability for which Purchaser is responsible under Section 7.2;

     (ix) except as required by GAAP or Applicable Law, not make any material change in the Business’ methods, principles and practices of accounting; and

     (x) not execute any Contract or letter of intent (whether or not binding) or other commitment, whether or not in writing, to do any of the foregoing.

          (b) Notwithstanding anything contained in this Agreement to the contrary, Seller, the Seller Entities and the Conveyed Companies shall be permitted to (i) maintain through the Closing Date the cash management system of the Business and the cash management procedures as currently conducted by Seller, the Seller Entities and the Conveyed Companies, (ii) withdraw all Cash and Cash Equivalents from each Conveyed Company and each Asset Selling Entity

immediately prior to the Closing (it being understood that nothing in this Agreement shall require Seller to ensure or otherwise convey to Purchaser any Closing Cash) and (iii) settle any intercompany accounts in a manner Seller deems appropriate so long as the settlement of all Assumed Intercompany Receivables and Assumed Intercompany Payables are accurately reflected in the Working Capital. Notwithstanding anything contained in this Agreement to the contrary, the Asset Selling Entities and the Conveyed Companies shall be permitted to borrow funds from Seller or its Affiliates as is necessary to operate the Business in the ordinary course and repay such borrowings in the ordinary course. Nothing contained in this Agreement shall give Purchaser, directly or indirectly, rights to control or direct the operations of the Business, the Purchased Assets or the Conveyed Companies prior to the Closing Date. During the period from the date of this Agreement until the earlier of (x) the date this Agreement is terminated in accordance with its terms and (y) the Closing Date, Purchaser shall not knowingly take any action or omit to take any action for the purpose of directly or indirectly preventing, materially delaying or materially impeding (or that would reasonably be expected to prevent, materially delay or materially impede) the consummation of the transactions contemplated by this Agreement, permit or cause any of its Subsidiaries or Affiliates to do any of the foregoing or agree or commit to do any of the foregoing, or agree in writing or otherwise to take any of the foregoing actions.

          Section 5.3 Efforts to Close. Except as otherwise set forth in Section 5.4, subject to the terms and conditions set forth herein, and to applicable Law, each Party agrees to use its reasonable best efforts to take, or cause to be taken, all actions necessary, and assist and cooperate with the other Party in doing, all things necessary, proper or advisable, to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated hereby, including the satisfaction of the respective conditions set forth in Article VI.

          Section 5.4 Antitrust Laws.

          (a) Purchaser shall: (i) as promptly as practicable but in no event later than the fifteenth (15th) day following the date hereof, take all actions necessary to file or cause to be filed the filings required of it or any of its Affiliates under any applicable Antitrust Laws in connection with this Agreement and the transactions contemplated hereby; (ii) use its best efforts to obtain the required consents from Antitrust Authorities, including antitrust clearance under the HSR Act and under any other applicable Antitrust Law, as promptly as practicable, and in any event prior to the End Date; (iii) at the earliest practicable date comply with (or properly reduce the scope of) any formal or informal request for additional information or documentary material received by it or any of its Affiliates from any Antitrust Authority; and (iv) consult and cooperate with Seller, and consider in good faith the views of Seller, in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any Party in connection with proceedings under or relating to any Antitrust Laws. Purchaser shall not communicate with any Antitrust Authority, whether orally or in writing, without notifying Seller. Seller shall (x) as promptly as practicable but in no event later than the fifteenth (15th) day following the date hereof, take all actions necessary to file or cause to be filed the filings required of it or any of its Affiliates under any applicable Antitrust Laws in connection with this Agreement and the transactions contemplated hereby; and (y) consult and cooperate with Purchaser, and consider in good faith the views of Purchaser, in connection with any analyses, appearances, presentations, memoranda, briefs, arguments,

opinions and proposals made or submitted by or on behalf of any Party in connection with proceedings under or relating to any Antitrust Laws. Each of the Parties will promptly notify the other Party of any written communication made to or received by such Party from any Antitrust Authority regarding any of the transactions contemplated hereby. Neither Party will participate in any substantive meeting or discussion with any such Antitrust Authority in respect of any filing, investigation or inquiry concerning this Agreement or the transactions contemplated hereby unless it consults with the other Party in advance and, to the extent permitted by such Antitrust Authority, gives the other Party the opportunity to attend, and furnish the other Party with copies of all correspondence, filings and written communications between them and their Affiliates and their respective Representatives on one hand and any such Antitrust Authority or its respective staff on the other hand, with respect to this Agreement and the transactions contemplated hereby.

          (b) Each Party shall be responsible for the fees, costs and expenses it incurs in connection with making such filings under the Antitrust Laws.

          (c) Purchaser shall not, and shall cause its Affiliates not to, acquire or agree to acquire, by merging with or into or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets, if the entering into of a definitive agreement relating to, or the consummation of such acquisition, merger or consolidation could reasonably be expected to: (i) impose any delay in the obtaining of, or increase the risk of not obtaining, any consents of any Governmental Authority necessary to consummate the transactions contemplated hereby or the expiration or termination of any applicable waiting period; (ii) increase the risk of any Governmental Authority entering an Order prohibiting the consummation of the transactions contemplated hereby; (iii) increase the risk of not being able to remove any such Order on appeal or otherwise; or (iv) delay or prevent the consummation of the transactions contemplated hereby.

          (d) Each Party shall use its reasonable best efforts to take all actions requested by any Antitrust Authority, or reasonably necessary to resolve any objections that may be asserted by any Antitrust Authority, with respect to the transactions contemplated by this Agreement under any Antitrust Law.

          (e) Neither Purchaser nor any of its Affiliates shall be required to (x) sell, divest, hold separate, license, cause a third party to acquire, or otherwise dispose of, the Business, the Purchased Assets, any Subsidiary, operations, divisions, businesses, product lines, customers or assets of Purchaser, its Affiliates, or any Conveyed Company, (y) take or commit to take such other actions that may limit Purchaser, its Affiliates, or any Conveyed Company’s freedom of action with respect to, or its ability to retain, one or more of its operations, divisions, businesses, product lines, customers or assets, or (z) enter into any Order, consent decree or other agreement to effectuate any of the foregoing.

          Section 5.5 Business Employees and Employee Benefits.

          (a) The employment of any Conveyed Company Business Employee shall not terminate upon the Closing, but shall continue with such Business Employees’ years of service

carried over for all purposes and, for a period ending not less than 12 months after the Closing Date, (1) at a rate of pay at least equal to, (2) with severance entitlements not less favorable than, and (3) with other employee benefits, perquisites and terms and conditions of employment (including benefits pursuant to qualified and non-qualified retirement and savings plans, medical, life insurance, disability, dental and pharmaceutical plans and programs, deferred compensation arrangements and incentive compensation plans) not substantially less favorable in the aggregate than, the rate of pay, severance entitlements and other employee benefits, perquisites and terms and conditions of employment provided to the Conveyed Company Business Employee, immediately prior to the Closing Date.

          (b) With regard to any Asset Selling Entity Business Employee, within a reasonable period of time (but not less than 30 days) prior to the Closing Date, Purchaser or its Affiliates, as appropriate, shall offer employment to each such Asset Selling Business Employee commencing as of the Closing Date, except for those individuals listed on Schedule 1.1(d) of the Seller Disclosure Letter. Purchaser or its Affiliates, as appropriate, shall employ such Business Employees in the same job or position as in effect immediately prior to the Closing Date and (x) at a rate of pay at least equal to, (y) with severance entitlements not less favorable than, and (z) with other employee benefits, perquisites and terms and conditions of employment (including benefits pursuant to qualified and non-qualified retirement and savings plans, medical, life insurance, disability, dental and pharmaceutical plans and programs, deferred compensation arrangements and incentive compensation plans) not substantially less favorable in the aggregate than, the rate of pay, severance entitlements and other employee benefits, perquisites and terms and conditions of employment provided to the Business Employee, or to which the Business Employee would be entitled, upon commencing employment with Seller, immediately prior to the Closing Date. For purposes of this Section 5.5, “pay” shall include base salary or wages plus any commission, variable pay target bonus, incentive compensation, premium pay, overtime and shift differentials, but not stock options or other equity-based compensation. Purchaser, at the time such employment offers are so extended, shall provide to Seller appropriate information regarding employment terms and conditions offered to the Business Employees, which shall conform in all respects to the provisions of this Section 5.5. Purchaser shall consult with Seller prior to the extension of employment offers with respect to communicating the offers to the Business Employees. Each Business Employee who accepts such offer of employment shall become an employee of Purchaser or one of its Affiliates on the Closing Date and is referred to as a “Transferred Employee,” and all such employees collectively are referred to as the “Transferred Employees.”

          (c) For a period of at least 12 months following the Closing Date, Purchaser covenants and agrees to continue to provide each Transferred Employee with the pay, severance, benefits, perquisites and terms and conditions of employment described in Section 5.5(b), unless the Transferred Employee’s employment is sooner terminated (other than in the case of severance or similar termination pay and benefits).

          (d) Provision of Health Benefits; Certain Welfare Plan Matters. Subject to the provisions of Section 5.5(a), effective commencing on the Closing Date (i) in countries in which Purchaser or one of its Affiliates currently operates, Purchaser shall enroll Transferred Employees in its currently sponsored health plans and programs, and (ii) in other countries, Purchaser shall provide or cause to be provided, coverage to all such Transferred Employees and

their respective spouses and dependents, under a group health plan sponsored by Purchaser or one of its Affiliates. With respect to such health plan and any other welfare benefit plans in which Transferred Employees are eligible to participate following the Closing, Purchaser shall, subject to applicable Laws of the respective countries, use best efforts to (y) ensure that no waiting periods, exclusions or limitations with respect to any pre-existing conditions, evidence of insurability or good health or actively-at-work exclusions are applicable to any Transferred Employees or their dependents or beneficiaries, and (z) provide or cause to be provided that any costs or expenses incurred by the Transferred Employees (and their respective dependents and beneficiaries) up to (and including) the Closing Date shall be specifically applied for purposes of satisfying applicable deductible, co-payment, coinsurance, maximum out-of-pocket provisions and like adjustments or limitations on coverage under any such welfare benefit plans. Purchaser shall be responsible under the employee welfare benefit plans of Purchaser for all amounts payable by reason of claims incurred by Transferred Employees and their eligible dependents and beneficiaries after the Closing Date.

          (e) Severance. Without limiting the generality of the foregoing, Purchaser shall have in effect for at least 12 months following the Closing Date severance and retention plans, practices and policies applicable to each Transferred Employee on the Closing Date that are not less favorable than such policies in effect immediately prior to the Closing Date with respect to such Transferred Employee. Purchaser shall indemnify and hold harmless Seller from any Liabilities arising under any of the severance cost categories listed on Schedule 5.5(e) of the Seller Disclosure Letter with respect to (i) any Asset Selling Entity Business Employee that does not become a Transferred Employee and (ii) those individuals listed on Schedule 1.1(d) of the Seller Disclosure Letter. For the avoidance of doubt, Purchaser shall not be responsible for any employment-related costs, including severance, for any Asset Selling Business Employee that does not become a Transferred Employee that Seller voluntarily elects in its sole discretion to continue to employ the applicable Asset Selling Entity after the Closing Date.

          (f) Liabilities. As of the Closing, each Transferred Employee shall cease active participation in, and to the extent applicable, shall cease accruing benefits under, each Benefit Plan other than, to the extent applicable, the Benefits Plans that are maintained by a Conveyed Company. Immediately prior to the Closing, Seller shall cease all responsibility for and liability with respect to coverage for any Transferred Employee under the Benefit Plans set forth on Schedule 3.13(a) of the Seller Disclosure Letter. From and after the Closing Date, Purchaser shall assume, honor and be solely responsible for paying, providing and satisfying when due the following: (i) all vacation, personal days, sick pay and other paid time off for Transferred Employees earned but unused as of the Closing Date, on terms and conditions not less favorable than the terms and conditions in effect immediately prior to the Closing Date, (ii) all compensation (including salary, wages, commissions, bonuses, incentive compensation, overtime, premium pay and shift differentials), vacation, personal days, sick pay and other paid time off, benefits and benefit claims, severance and termination pay, notice and benefits under all applicable Laws and under any Benefit Plan, and all other liabilities, in each case accruing, incurred or arising as a result of employment or separation from employment with Purchaser after the Closing Date with respect to Transferred Employees, and (iii) severance and termination pay, notice or other liabilities accruing, incurred or arising as a result of separation from employment of (A) any Conveyed Company Business Employee (including those who choose to terminate their employment as a result of the transactions contemplated herein) or (B) any

Transferred Employee, on or after the Closing Date. In the event that Seller is required to honor, pay or provide any of the items contemplated to be assumed, honored, paid or satisfied by Purchaser hereunder, then Purchaser will indemnify and hold harmless Seller for any such items so honored, paid or provided by Seller.

          (g) Effective as of the Closing, Purchaser shall be responsible for providing COBRA continuation coverage to the Transferred Employees who are employees in the United Sates with respect to which COBRA is applicable. Further, to the extent COBRA continuation coverage is required to be provided, Purchaser shall assume responsibility for any Transferred Employees who become “M&A qualified beneficiaries” (within the meaning of Code Section 4980B) by the transactions contemplated by this Agreement.

          (h) Credited Service. With respect to each employee benefit plan, policy or practice, including severance, vacation and paid time-off plans, policies or practices, sponsored or maintained by Purchaser, to the extent permitted under applicable Law, Purchaser shall recognize or shall cause its Affiliates to recognize, for all Transferred Employees from and after the Closing Date, credit for all service with Seller, prior to the Closing Date for all purposes (including eligibility to participate, vesting credit, eligibility to commence benefits, early retirement subsidies, severance and, subject to the next sentence, benefit accrual. Notwithstanding the foregoing, no such service shall be counted to the extent it creates a right to duplicative benefits under any Seller plan or Purchaser plan.

          (i) No Third Party Beneficiaries. This Agreement shall inure exclusively to the benefit of and be binding upon the parties hereto and their respective successors, assigns, executors and legal representatives. Without limiting the generality of Section 10.6, nothing in this Section 5.5, express or implied, is intended to constitute an amendment to any Benefit Plan or confer on any employee or other person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or Liabilities under or by reason of this Agreement.

          Section 5.6 Wage Reporting. Purchaser and Seller shall utilize, or cause their Affiliates to utilize, the standard procedure set forth in Section 4 of Rev. Proc. 2004-53, with respect to United States wage reporting for the full calendar year in which the Closing occurs, pursuant to which Purchaser and Seller shall report on a “predecessor-successor” basis, as set forth therein.

          Section 5.7 Non-Competition. For a period of three (3) years after the Closing Date (the “Restricted Period”), (a) Seller shall not, and shall ensure its Affiliates shall not, manufacture Restricted Products for sale to customers that are engaged in the electric utility business in Australia Brazil, Canada, China, Indonesia, Malaysia, Mexico, Poland, South Africa, Spain, Thailand, United Kingdom and the United States and its territories (the “Restricted Customers”) and (b) Seller shall provide Buyer the opportunity to submit a bid to Seller for any Restricted Products proposed to be sold to a Restricted Customers, provided, that Seller shall not be obligated to accept any such bid based on those business factors that Seller deems relevant. Purchaser shall designate to Seller in writing the person to whom Seller shall contact in connection with its obligations in Section 5.7(b), which person shall initially be Dennis F. McKenna. Notwithstanding the foregoing, the provisions of this Section 5.7 shall not apply to (i)

any manufacturing or sales related to an acquisition of the business of any third party (whether by merger, stock purchase, investment or otherwise) or through the acquisition of the assets of any third party except for any third party that at the time of such acquisition derives greater than fifty-percent (50%) of its revenue from the sale of Restricted Products to the Restricted Customers (ii) third party or any of its Affiliates that acquires an interest in Seller or its Affiliates or (iii) to any party as of and following such time that such Person ceases to be an Affiliate of Seller.

          Section 5.8 Collection of Accounts Receivable. If the Closing occurs, Seller shall promptly forward to Purchaser any monies, checks or instruments received by Seller or any of its Affiliates after the Closing Date with respect to the accounts receivable purchased by Purchaser.

          Section 5.9 Intellectual Property Rights and Restrictions.

          (a) Promptly upon the Closing, Purchaser shall cause each division of the Business and each Conveyed Company (each, a “Purchased Division”) to change its name to a name that does not include “Tyco”, “Tyco Electronics”, any of Seller’s Marks or any derivatives thereof or anything confusingly similar thereto and Purchaser, each Affiliate thereof, the Purchased Division(s) and their respective directors, officers, successors, assigns, agents or representatives shall not register or attempt to register, and shall not directly or indirectly use (except as permitted in this Section 5.9(a)), in any fashion, including in signage, corporate letterhead, business cards, internet websites, marketing material and the like, or seek to register, in connection with any products or services anywhere in the world in any medium, any name, mark or symbol that includes, is identical to or is confusingly similar to, any of the trademarks, service marks, domain names, trade names or other indicia of origin set forth on Schedule 5.9(a) of the Seller Disclosure Letter or any other indicia of origin characterized as an Excluded Asset under this Agreement (collectively, “Seller’s Marks”), nor shall any of them challenge or assist any third party in opposing the rights of Seller or any Affiliate of Seller anywhere in the world in any such Intellectual Property. For the avoidance of doubt, in no event shall any of the Transferred Intellectual Property be deemed to constitute Intellectual Property that includes, is identical to or is confusingly similar to, any of Seller’s Marks. Purchaser acknowledges and agrees that (except as provided for in this Section 5.9(a)) no right or grant is provided for herein for Purchaser or any Purchased Division to (i) use any of Seller’s Marks alone or in combination with any other mark, name or term or (ii) grant sublicenses to any of Seller’s Marks for any purpose whatsoever. Subject to the restrictions set forth herein, Seller hereby grants to Purchaser effective as of the Closing Date a personal, worldwide, nonexclusive, royalty-free and fully paid license for four (4) months after the Closing Date, to use tools, dies and molds acquired by Purchaser hereunder which carry one or more of Seller’s Marks to be cast, struck or molded into Inventory. Purchaser shall in any event phase out such use of such tools, dies and molds as soon as is reasonably practicable and, in particular, shall if practicable remove the cast for such marks from each such tool, die or mold on the first occasion after the Closing Date when such tool, die or mold is refurbished. Notwithstanding the foregoing, Seller hereby grants to Purchaser, effective as of the Closing Date, a personal, worldwide, nonexclusive, royalty-free and fully paid license to use Seller’s Marks solely with respect to Inventory as of the Closing Date. Such limited license shall terminate four (4) months after the Closing Date regardless of whether or not Inventory branded with Seller’s Marks remain in Inventory of Purchaser or any Purchased

Division. Inventory subject to this license does not need to be rebranded if sold prior to termination of the four-month license period. All use of Seller’s Marks as permitted hereunder shall inure to the benefit of Seller. Purchaser shall ensure that immediately following the Closing Date any hypertext links to Internet websites operated by Seller or its Affiliates and any other use of Seller’s Marks are removed from any Internet web sites operated by any Purchased Division or included in the Purchased Assets.

          (b) Promptly upon the Closing, Seller shall cause each of its Affiliates, as applicable, to change its name to a name that does not include “Dulmison”, any of the Transferred Intellectual Property Marks or any derivatives thereof or anything confusingly similar thereto and Seller, its Affiliates and their respective directors, officers, successors, assigns, agents or representatives shall not register or attempt to register, and shall not directly or indirectly use, in any fashion, including in signage, corporate letterhead, business cards, internet websites, marketing material and the like, or seek to register, in connection with any products or services anywhere in the world in any medium, any name, mark or symbol that includes, is identical to or is confusingly similar to, any of the trademarks, service marks, domain names, trade names or other indicia of origin set forth on Schedule 5.9(b) of the Seller Disclosure Letter or characterized as a Purchased Asset under this Agreement (collectively, “Purchased Marks”), nor shall any of them challenge or assist any third party in opposing the rights of Purchaser or any Affiliate of Purchaser anywhere in the world in any such Intellectual Property. Notwithstanding the foregoing, from and after the Closing Date:

     (i) Purchaser hereby grants to Seller and its Affiliates a perpetual, worldwide, nonexclusive, nontransferable (except as set forth herein), royalty-free and fully-paid license under the Transferred Intellectual Property (other than Purchased Marks) to make, have made, use, sell, offer for sale and import, reproduce, perform, display or distribute any products derived from or related to the Insulator Business.

     (ii) Purchaser hereby grants to Seller and its Affiliates a three (3) year, worldwide, nonexclusive, nontransferable (except as set forth herein), royalty-free and fully-paid license under the Purchased Marks to use, reproduce and affix the Purchased Marks solely in connection with the Insulator Business.

     (iii) Purchaser hereby grants to Seller and its Affiliates an irrevocable, worldwide, nonexclusive, nontransferable (except as set forth herein), royalty-free and fully-paid license under the Purchased Marks (A) to use the Purchased Marks in any marketing materials existing on the date of the Closing until the time that such marketing materials are consumed in the ordinary course of business (but in no event longer than twelve (12) months after the Closing Date), (B) for four (4) months after the Closing Date to use any tools, dies and molds which carry the Purchased Marks, other than with respect to (1) high voltage connector systems for sub-stations and (2) low voltage products, for which such period shall be nine (9) months, and (C) for Inventory existing on the date of Closing and any Inventory created with such tools, dies or molds (but in no event longer than one (1) year after the Closing Date, other than other than with respect to (1) high voltage connector systems for sub-stations and (2) low voltage products, for which such period shall be eighteen (18) months); provided, however, that nothing in this clause (iii) shall relieve Seller from its obligation to comply with Section 5.7.

The licenses contemplated in Sections 5.9(b)(i),(ii) and (iii) shall include the right of Seller and its Affiliates to grant sublicenses solely to any third party that acquires from Seller or any of its Affiliates, whether by a stock sale, an asset sale, or a merger or consolidation, (x) in the case of Sections 5.9(i) and (ii), the Insulator Business and (y) in the case of Section 5.9(iii), any of their business units or product lines.

          Section 5.10 Resale or Other Exemption Certificates. At the Closing (or within such reasonable time thereafter as may be necessary to perfect the resale or other exemption certificates), Purchaser shall deliver to Seller fully completed and executed resale exemption certificates or other applicable exemption certificates for all states and localities identified by Seller in Schedule 5.10 of the Seller Disclosure Letter as jurisdictions in which Inventory is to be transferred. Notwithstanding the provisions of Section 7.3(d), to the extent any jurisdiction refuses to accept any resale exemption certificate or other applicable exemption certificate provided by Purchaser, Seller and Purchaser agree that any Transfer Taxes (and related interest and penalty) assessed by such jurisdiction shall be borne by Purchaser.

          Section 5.11 Post-Closing Information.

          (a) Except with respect to Tax Records, which are covered exclusively by Section 7.9, for a period of seven (7) years following the Closing, upon written advance request from a Party (“Requesting Party”), the other party shall, and shall cause its Affiliates to, afford to the Requesting Party and its Representatives reasonable access during regular normal business hours to the properties, books and records and employees of the party with respect to the Business to the extent necessary to prepare or defend any judicial or administrative proceeding related to the Business, or to enable the Requesting Party and its Representatives to satisfy its financial reporting obligations.

          (b) After the Closing, each Party (including its outside accountants) shall have reasonable access, during normal business hours and upon reasonable notice, to the records of the Business and to personnel of the other Party or its Affiliates as it relates to the Business and to any other information or personnel that such Party reasonably requests, in connection with completing the audit of its accounts.

          Section 5.12 Indemnification of Officers and Directors.

          (a) The certificate of incorporation, bylaws or other comparable organizational documents of each of the Conveyed Companies shall contain provisions no less favorable with respect to indemnification of officers and directors serving in these capacities at Closing than are set forth in such documents immediately prior to the Closing, which provisions shall not be amended, repealed or otherwise modified for a period of six (6) years after the Closing in any manner that would adversely affect the rights thereunder of individuals who at or prior to the Closing were present or former managers, members, directors, officers, employees or agents of the Conveyed Companies (each, together with such person’s heirs, executors or administrators, a “Conveyed Company Covered Person”) relating to service prior to the Closing.

          (b) Purchaser shall cause to be maintained in effect for six (6) years after the Closing the current policies of the directors’ and officers’ liability insurance maintained by or on

behalf of the Conveyed Companies with respect to matters occurring prior to the Closing; provided, that Purchaser may substitute therefor policies of at least the same coverage containing terms and conditions that are not less favorable than the existing policies (including with respect to the period covered) with at least 30 days notice to Seller (which notice shall contain all material terms of such substituted policy), with Seller being responsible for the cost of such insurance that exceeds the cost of the applicable insurance in effect as of the time of Closing. Upon notice of planned substitution by Purchaser, Seller may, at its option upon notice to Purchaser with in 30 days of receiving Purchaser’s planned substitution notice, choose to take over Purchaser’s obligations under this Section 5.12, in which case Purchaser shall be responsible for, and shall pay to Seller, the cost of the applicable insurance in place at the time of Closing.

The rights of each Conveyed Company Covered Person pursuant to this Section 5.12 shall be in addition to, and not in limitation of, any other rights such Conveyed Company Covered Person may have under the certificate of incorporation, bylaws or other comparable organizational documents of each of the Conveyed Companies, any other indemnification arrangement, applicable Laws or otherwise. The provisions of this Section 5.12 shall survive the consummation of the transactions contemplated hereby and are expressly intended to benefit each Conveyed Company Covered Person.

          Section 5.13 Replacement of Parent Guarantees.

          (a) Prior to the Closing Date, Purchaser shall use its reasonable best efforts to, effective as of the Closing Date, (i) cause to be terminated each of the parent guarantees listed on and described in Schedule 5.13(a)(i) of the Seller Disclosure Letter or any guarantees entered into after the date hereof in the ordinary course of the Business (including renewals and extensions of any of the foregoing) (the “Parent Guarantees”) and (ii) replace the letters of credit set forth on Schedule 5.13(a)(iii) of the Seller Disclosure Letter or any letters of credit issued after the date hereof in the ordinary course of the Business by Seller or any of its Affiliates (other than the Conveyed Companies) in support of any obligation of the Business (the “Parent LofCs”) and terminate any related reimbursement obligations or other Contracts between and among Seller and its Affiliates (other than the Conveyed Companies), on the one hand, and the beneficiary of any such Parent Guarantee or the provider of any such Parent LofC, on the other hand. In the event that any such Parent Guarantee or Parent LofC or any such reimbursement obligation or other Contract remains outstanding as of the Closing Date, Purchaser shall deliver to Seller at the Closing an unconditional letter of credit in form and substance satisfactory to Seller in its reasonable discretion from a bank or other financial institution acceptable to Seller in its reasonable discretion for (A) in the case of any such Parent Guarantee, the aggregate amount that may be payable under such Parent Guarantee or (B) in the case any such Parent LofC, the amount of such Parent LofC.

          (b) To the extent Purchaser is unable to terminate or replace a Parent Guarantee or Parent LofC or obtain the beneficiary’s consent to the substitution thereof prior to the Closing as contemplated by Section 5.13(a), Purchaser shall have a continuing obligation after the Closing to use its reasonable best efforts to have any such Parent Guarantee terminated or replaced in a manner consistent with Section 5.13(a) and to have any such Parent LofC terminated. To the extent that Seller or any of its Affiliates has performance obligations under

any such Parent Guarantee, Purchaser and its Affiliates shall use their respective reasonable best efforts to perform such obligations on behalf of such party or otherwise take such action as reasonably requested by Seller so as to put such party in the same position as if Purchaser (or its Affiliates), and not such party, had performed or were performing such obligations. Purchaser shall not, and shall not permit the Business without first consulting with Seller, to enter into any amendment or waiver with respect to, or exercise any renewal option or other similar provision under, any Contract, agreement, lease or other arrangement that is the subject of a Parent Guarantee or Parent LofC that has the effect of extending the term of such Contract, agreement, lease or other arrangement beyond its current term or otherwise increasing the exposure under the applicable Parent Guarantee or Parent LofC. Notwithstanding Seller’s obligation to consult with Purchaser in connection with the foregoing sentence, neither Seller nor any of its Affiliates shall have any obligation to extend the term, or otherwise agree to any amendment or waiver, of any Parent Guarantee that remains outstanding after the Closing.

          Section 5.14 Exclusive Dealing.

          (a) During the period from the date of this Agreement until the earlier of (i) the date this Agreement is terminated in accordance with its terms and (ii) the Closing Date, Seller shall not take, and shall cause the Seller Entities and their respective Affiliates and Representatives to refrain from taking, any action, directly or indirectly, to solicit or engage in discussions or negotiations with, or provide any information to, any Person, other than Purchaser (and its Affiliates and the Purchaser Representatives), concerning the purchase of the Business (whether by merger, recapitalization or other similar transaction).

          (b) Immediately following the execution of this Agreement, Seller shall, and shall cause its Affiliates, and each of their respective Representatives to terminate any existing discussions or negotiations with any Persons, other than Purchaser (and its Affiliates and the Purchaser Representatives), concerning the purchase of the Business.

          Section 5.15 No Hire and Non-Solicitation of Employees.

          (a) Neither Seller nor any of its Affiliates will at any time prior to eighteen (18) months from the Closing Date, directly or indirectly, (i) solicit the employment or services (whether as an employee, consultant, independent contractor or otherwise) of any of the Conveyed Company Business Employees or Transferred Employees specified on Schedule 5.15(a) of the Seller Disclosure Letter without Purchaser’s prior written consent or (ii) hire in any capacity (whether as an employee, consultant, independent contractor or otherwise) any of the Conveyed Company Business Employees or Transferred Employees specified on Schedule 5.15(a) of the Seller Disclosure Letter, who is not terminated by Purchaser or any of its Affiliates subsequent to the Closing, without Purchaser’s prior written consent. For purposes of this Section 5.15, the term “solicit the employment or services” shall not be deemed to include generalized searches for employees through media advertisements of general circulation, employment search firms, open job fairs or otherwise; provided, that such searches are not focused or targeted on Persons specified on Schedule 5.15(a) or Schedule 5.15(b) of the Seller Disclosure Letter.

          (b) Neither Purchaser nor any of its Affiliates will at any time prior to eighteen (18) months from the Closing Date, directly or indirectly, (i) solicit the employment or services (whether as an employee, consultant, independent contractor or otherwise) of any of the employees of Seller and its Affiliates specified on Schedule 5.15(b) of the Seller Disclosure Letter without Seller’s prior written consent or (ii) hire in any capacity (whether as an employee, consultant, independent contractor or otherwise) any of the employees of Seller and its Affiliates specified on Schedule 5.15(b) of the Seller Disclosure Letter, who is not terminated by Seller or any of its Affiliates subsequent to the Closing, without Seller’s prior written consent.

          Section 5.16 Post-Closing Obligations for Leases. Purchaser shall not, without the prior written consent of Seller, exercise any right with regard to, or enter into, any amendment, renewal, modification or waiver of any Real Property Lease that could extend the term thereof beyond its then-current term with respect to any Real Property Lease as to which Seller or one of its Affiliates remains the leasing party, or a guarantor, or is otherwise secondarily liable for the obligations of the lessee, under such lease. Notwithstanding the foregoing, with respect to any Real Property Lease that involves a month-to-month tenancy and with respect to which Seller or one of its Affiliates remains the leasing party, or a guarantor or is otherwise secondarily liable, in no event shall Purchaser extend such Real Property Lease (or otherwise continue or renew such month-to-month tenancy) later than the date that is twelve (12) months after the Closing Date. Nothing in this Agreement shall be deemed to prevent Purchaser from seeking a novation of, or entering into a new lease for the Leased Real Property relating to, any Real Property Lease as to which Seller remains the leasing party, or a guarantor, or is otherwise secondarily liable for the obligations of the lessee under such lease so long as such novation or new lease contains a full release of all obligations of Seller and/or its Affiliate, as the case may be, under such Real Property Lease.

          Section 5.17 Confidentiality.

          (a) Each party agrees to continue to abide by the Confidentiality Agreement, the terms of which are incorporated by reference in this Agreement and which terms will survive until the Closing, at which time the Confidentiality Agreement will terminate; provided, however, that if this Agreement is, for any reason, terminated prior to the Closing, the Confidentiality Agreement will continue in full force and effect. Except as contemplated by Section 10.6, the existence of this Agreement and the terms hereof and thereof (including the Exhibits and Schedules appended hereto and thereto and the Seller Disclosure Letter) will be deemed “Evaluation Material”, as defined in, and pursuant to the terms of, the Confidentiality Agreement.

          (b) From and after the Closing Date, Seller shall (and shall cause its Affiliates to) keep in strict confidence, and will not, directly or indirectly, at any time, disclose, divulge or make available to any Person, or use for commercial purposes (i) any confidential or proprietary information of the Conveyed Companies or included as part of the Purchased Assets, or (ii) any other confidential or proprietary information of Purchaser or its Affiliates furnished to Seller or its Affiliates in connection with the transactions contemplated by this Agreement, in each case, without the prior written consent of Purchaser unless (A) contemplated by this Agreement or in connection with the transactions contemplated by this Agreement, (B) compelled to disclose such information by judicial or administrative process or (C) by other requirements of applicable

Law or except to the extent such documents or information can be shown to have been (x) in the public domain through no fault of Seller or any of its Affiliates or (y) later lawfully acquired by Seller or any of its Affiliates from sources other than those related to its prior ownership of the Business. In the event that Seller or any of its Affiliates is compelled to disclose any such confidential or proprietary information by judicial or administrative process or by other requirements of applicable Law, to the extent reasonably practicable and subject to applicable Law, Seller shall promptly notify Purchaser of such event and reasonably cooperate with Purchaser in commercially reasonable efforts to quash such judicial or administrative process or otherwise protect the confidentiality of the confidential or proprietary information of Purchaser or its Affiliates.

          (c) From and after the Closing Date, Purchaser shall (and shall cause its Affiliates to) keep in strict confidence, and will not, directly or indirectly, at any time, disclose, divulge or make available to any Person, or use for commercial purposes, any confidential or proprietary information of Seller or its Affiliates furnished to Purchaser or its Affiliates in connection with the transactions contemplated by this Agreement without the prior written consent of Purchaser unless (A) contemplated by this Agreement or in connection with the transactions contemplated by this Agreement, (B) compelled to disclose such information by judicial or administrative process or (C) by other requirements of applicable Law or except to the extent such documents or information can be shown to have been (x) in the public domain through no fault of Seller or any of its Affiliates or (y) later lawfully acquired by Purchaser or any of its Affiliates from sources other than those related to its ownership of the Business. In the event that Purchaser or any of its Affiliates is compelled to disclose any such confidential or proprietary information by judicial or administrative process or by other requirements of applicable Law, to the extent reasonably practicable and subject to applicable Law, Purchaser shall promptly notify Seller of such event and reasonably cooperate with Seller in commercially reasonable efforts to quash such judicial or administrative process or otherwise protect the confidentiality of the confidential or proprietary information of Seller or its Affiliates.

          Section 5.18 Insurance Recovery. With respect to events relating to the Conveyed Companies, Purchased Assets or Assumed Liabilities that occurred or existed prior to the Closing Date that are covered by Seller’s or its Affiliates’ occurrence-based third-party liability insurance policies, Purchaser may reasonably request Seller to, and Seller shall, make claims under such policies to the extent such coverage and limits are available under such policies; provided, however, that Seller shall not be required to pay any amount to Purchaser pursuant to this Section 5.18 unless and until it has received payment associated with claims under such policies from the third-party insurer (net of any deductible or other itemized reasonable out of pocket costs or expenses related to such claims ). Purchaser and Seller shall cooperate in connection with making such claim and each Party shall provide the other with all reasonably requested information necessary for Seller to make such claim.

          Section 5.19 Foreign Corrupt Practices Act.

          (a) In connection with any violation, alleged violation or inquiry regarding a potential violation of the Foreign Corrupt Practices Act or similar law in other countries by Seller, any Seller Entity, any Conveyed Company or any Affiliate of any thereof that relates to the pre-closing operation of the Business and for which Seller retains liability under this

Agreement, including under Article VIII for a breach of Section 3.21, (i) each Party shall notify the other as soon as practicable of the notifying Party’s receipt of any communication from any Governmental Authority with respect thereto; (ii) Purchaser shall notify Seller prior to Purchaser’s initiation of any communication to any Governmental Authority with respect thereto, to enable Seller to consider and comment thereon in advance and, except as required by applicable Laws, Seller shall notify Purchaser prior to Seller’s initiation of the initial or any other material communication to any Governmental Authority with respect thereto, except for the matter set forth on Schedule 5.19(a) of the Seller Disclosure Letter for which Seller already has received notice; (iii) each Party shall provide the other Party access to data, records and employees as timely as practicable in response to that other Party’s reasonable request therefor, in connection with communications with Governmental Authorities and attendance at conferences, discovery proceedings, hearings, trials or appeals, and shall use its commercially reasonable efforts to cause the requisite employees to participate therein; and (iv) the Parties shall cooperate reasonably in efforts to secure access to former employees or third parties with information relevant to any such violation, alleged violation or inquiry. Notwithstanding anything to the contrary in this Agreement, (x) Seller shall pay all reasonable out-of-pocket costs and expenses attendant to the matters referred to in clauses (i) — (iv) of the immediately preceding sentence, and (y) Seller shall at its sole option either (A) select counsel reasonably satisfactory to Purchaser to represent Purchaser in connection with any such violation, alleged violation or inquiry and make timely payment of all fees and expenses of such counsel, provided that Willkie Farr & Gallagher LLP is deemed satisfactory to Purchaser, or (B) reimburse Purchaser for all fees and expenses of counsel selected by Purchaser for that purpose, in each case within 30 days after Seller’s receipt of counsel’s invoice therefor. Seller shall elect to proceed under clause (y)(A) or (B) of the immediately preceding sentence within fifteen (15) days after its receipt of any written request from Purchaser therefor, accompanied by a written description of any communication or other event that gave rise to Purchaser’s need for such counsel. If Seller elects to proceed under clause (y)(A) hereof, Purchaser may retain its own counsel in addition, at Purchaser’s expense, and Seller shall cause counsel retained by it to consult, at Purchaser’s reasonable request, with such counsel retained by Purchaser.

          (b) In connection with any violation, alleged violation or inquiry regarding a potential violation of the Foreign Corrupt Practices Act or similar law in other countries by Seller, any Seller Entity, any Conveyed Company or any Affiliate of any thereof that relates to the pre-Closing operation of the Business and for which Purchaser may incur liability and Seller does not retain liability under this Agreement, (i) each Party shall notify the other as soon as practicable of receipt of any communication from any Governmental Authority with respect thereto; (ii) each Party shall notify the other Party prior to the notifying Party’s initiation of any communication to any Governmental Authority with respect thereto, to enable the notified Party to consider and comment thereon in advance, provided, that except as may otherwise be required by applicable Laws, Seller shall not initiate any communication to any Governmental Authority with respect thereto without Purchaser’s prior written consent; (iii) Seller shall provide Purchaser access to data, records and employees as timely as is practicable in response to Purchaser’s reasonable request therefor, in connection with communications with Governmental Authorities and attendance at conferences, discovery proceedings, hearings, trials or appeals, and shall use its commercially reasonable efforts to cause the requisite employees to participate therein, and (iv) Seller shall cooperate reasonably in efforts to secure access to former employees or third parties with information relevant to any such violation, alleged violation or inquiry. Purchaser

shall pay all reasonable out-of-pocket costs and expenses attendant to the matters referred to in clauses (i) — (iv) of the immediately preceding sentence. Seller may retain its own counsel in addition, at Seller’s expense, and Purchaser shall cause counsel retained by it to consult, at Seller’s reasonable request, with such counsel retained by Seller.

          (c) The Parties’ obligations set forth in this Section 5.19 are in addition to those set forth in Article VIII hereof, and if this Section 5.19 imposes greater duties on any Party than are imposed under Article VIII, this Section 5.19 will prevail. For the avoidance of doubt, this clause (c) does not in anyway alter or modify the time limitations set forth in Section 8.1(a) or the monetary limitations in Section 8.4.

          Section 5.20 Juarez Transition. Prior to Closing, upon issuance of a purchase order by Purchaser, Seller will use commercially reasonable efforts to produce such additional inventory of the products of the Business currently produced in the Seller’s Juarez, Mexico plant as Purchaser may reasonably estimate is necessary for the transition (the “Juarez Transition”) by Purchaser of the Purchased Assets from Juarez to a Purchaser facility. In the event the Closing occurs prior to ninety (90) days after the date hereof and Purchaser reasonably believes that sufficient inventory related to the foundry operations in Juarez has not been produced for the Juarez Transition, then Seller and Purchaser will negotiate in good faith reasonable accommodations for continuing to produce such inventory; provided, however, that (a) nothing in this provision shall permit the operation of the Business in Juarez to continue for any period after the date ninety (90) days after the date hereof and (b) Purchaser shall be responsible for all Liabilities in respect of such any such accommodation. For the avoidance of doubt, (i) failure to produce the amount of inventory necessary for the transition prior to Closing shall not give rise to any claim that any of the conditions to closing in Article 6 are not satisfied and (ii) compliance with this provision shall be an exception to Section 5.2.

          Section 5.21 Supply Provisions.

          (a) After the Closing, if Seller or any of its Affiliates is obligated to supply products of the Business under any Contract or purchase order or bid to enter into a contract or purchase order that is outstanding as of the Closing Date, then Purchaser agrees to supply such products of the Business on such pricing terms as agreed with the end customer in such Contract, purchase order or bid and on such other terms and conditions as reasonably negotiated and agreed between Purchaser and Seller. The provisions of this Section 5.21(a) will only apply to the extent Seller has notified Purchaser in writing of such situation prior to eighteen (18) months after the Closing Date.

          (b) After the Closing, if Purchaser or any of its Affiliates is obligated to supply products of the Tyco Core Businesses under any Contract or purchase order included in the Purchased Assets or any bid to enter into a contract or purchase order that is outstanding as of the Closing Date, then Purchaser agrees to supply such products of the Tyco Core Businesses on such pricing terms as agreed with the end customer in such Contract, purchase order or bid and on such other terms and conditions as reasonably negotiated and agreed between Purchaser and Seller. The provisions of this Section 5.21(b) will only apply to the extent Purchaser has notified Seller in writing of such situation prior to eighteen (18) months after the Closing Date.

          Section 5.22 Applicable Employee. From the Closing until March 31, 2010, or such earlier date as notified in writing by Purchaser (the “Retention Period”), Seller agrees to continue to retain the Applicable Employee as an employee of Seller or its Affiliates to perform work for and on behalf of Purchaser. Purchaser shall reimburse Seller for any and all costs and expenses incurred by Seller in respect of the Applicable Employee during the Retention Period, including, without limitation, all payroll, apartment lease, pension and other benefits and related costs and expenses in respect of the Applicable Employee as well as for allocations of any other cost related to such Applicable Employee that are consistent with the historical allocation of costs to the Business by Seller related to the Applicable Employee. Except as may be required by applicable Laws, Seller will not increase the terms of the Applicable Employee’s compensation without Purchaser’s prior written consent. Purchaser hereby covenants and agrees for the benefit of Seller and its Affiliates to use commercially reasonable efforts to ensure that persons conducting business or otherwise interacting or having contact with the Applicable Employee are informed and understand that the Applicable Employee has no power or authority to bind, commit or otherwise obligate Seller or any of its Affiliates in respect of any transaction or Liability. Purchaser shall indemnify and hold harmless Seller and its Affiliates from and against any and all Losses arising out of or in connection with: (a) any Assumed Liability (other than Excluded Liabilities) related to the Applicable Employee as if the Applicable Employee was treated as an Asset Selling Entity Business Employee that had accepted his offer of employment by Purchaser as contemplated hereunder, (b) any act or omission (or alleged act or omission) of the Applicable Employee that occurs (or is alleged to have occurred) during the Retention Period, regardless of legal theory, and whether based in tort, contract, strict liability or otherwise, (c) any claim, action, cause of action or other proceeding brought or asserted by or on behalf of the Applicable Employee in respect of his or her employment and based upon facts or circumstances arising during the Retention Period (including, without limitation, any claim of discrimination on any basis, harassment or unlawful termination), except to the extent caused by Seller’s gross negligence or willful misconduct and (d) any and all Losses (including any severance costs) associated with the termination of employment of the Applicable Employee for any reason during or after the expiration of the Retention Period, including any Losses relating to the Applicable Employee’s apartment lease.

ARTICLE VI

CONDITIONS PRECEDENT

          Section 6.1 Conditions to the Obligations of Each Party. The respective obligations of Purchaser and Seller to consummate the transactions contemplated hereby are subject to the satisfaction or waiver by Purchaser or Seller, as appropriate, at or before the Closing Date, of each of the following conditions:

          (a) Injunctions; Illegality. The consummation of the transactions contemplated hereby shall not be restrained, enjoined or prohibited by any Order and there shall not have been any Law enacted, promulgated or deemed applicable to the transactions contemplated hereby by any Governmental Authority that prevents the consummation of such transactions or has the effect of making such consummation thereof illegal.

          (b) Antitrust Laws; Similar Laws. Any applicable waiting periods under the HSR Act with respect to the transactions contemplated by this Agreement or other applicable waiting period (or any extension thereof), filings or approvals under the Antitrust Laws to consummate the transactions contemplated hereby shall have expired, been terminated, been made or been obtained.

          (c) Governmental Authorizations. All filings with, and consents and approvals of, the Governmental Entities set forth on Schedule 6.1(c) must have been made or obtained.

          Section 6.2 Conditions to the Obligations of Purchaser. The obligations of Purchaser to consummate the transactions contemplated hereby are subject to the satisfaction or waiver by Purchaser on or prior to the Closing Date of the following further conditions:

          (a) Performance. All of the agreements and covenants of Seller to be performed prior to the Closing pursuant to this Agreement shall have been duly performed in all material respects;

          (b) Representations and Warranties. The representations and warranties of Seller contained in Article III shall be true and correct without regard to any “materiality” or “Material Adverse Effect” qualifiers as of the Closing Date (other than those qualifiers specified on Schedule 6.2(b)) of the Seller Disclosure Letter,) as if made at and as of such time (other than those made as of a specified date, which shall be true and correct in all respects as of such specified date), except for such failures to be true and correct that do not have, individually or in the aggregate, a Material Adverse Effect;

          (c) No Material Adverse Effect. Since the date of this Agreement, there will not have occurred a Material Adverse Effect;

          (d) Certificate. Purchaser shall have received a certificate signed by Seller, dated as of the Closing Date, to the effect that the conditions set forth in Sections 6.2(a), (b) and (c) have been satisfied;

provided, however, that the conditions set forth this Section 6.2 shall not apply to any failure of any representation or warranty to be true and correct arising from or relating to (A) the Parties’ compliance with Section 5.4(d), including Purchaser (x) proposing, negotiating, committing to or effecting, by consent decree, hold separate order, or otherwise, the sale, transfer, divestiture, license, or disposition of operations, divisions, businesses, product lines or assets or (y) otherwise taking or committing to take actions that limit or could limit Purchaser’s or its Affiliates’ (including, after the Closing, the Conveyed Companies) freedom of action with respect to, or its ability to retain, one or more of their respective operatives, divisions, businesses, product lines or assets, or (B) the application of Antitrust Laws (including any Action or judgment arising under Antitrust Laws) to the transactions contemplated by this Agreement.

          Section 6.3 Conditions to the Obligations of Seller. The obligations of Seller to consummate the transactions contemplated hereby are subject to the satisfaction or waiver by Seller on or prior to the Closing Date of the following further conditions:

          (a) Performance. All of the agreements and covenants of Purchaser to be performed prior to the Closing pursuant to this Agreement shall have been duly performed in all material respects;

          (b) Representations and Warranties. The representations and warranties of Purchaser contained in Article IV shall be true and correct in all material respects at and as of the Closing Date as if made at and as of such time (other than those made as of a specified date, which shall be true and correct in all respects as of such specified date); and

          (c) Certificate. Seller shall have received a certificate signed by Purchaser, dated as of the Closing Date, to the effect that the conditions set forth in Sections 6.3(a) and (b) have been satisfied.

          Section 6.4 Frustration of Closing Conditions. None of Purchaser or Seller may rely on the failure of any condition set forth in this Article VI to be satisfied if such failure was caused by such Party’s failure to act in good faith or such Party’s failure to use its reasonable best efforts to cause the Closing to occur, as required by Section 5.3.

ARTICLE VII

TAX MATTERS

          Section 7.1 Allocation of Taxes to Seller.

          (a) Seller shall be responsible for and will pay or cause to be paid and will indemnify Purchaser and its Affiliates from and against any and all Taxes relating to any and all of the following (collectively, “Seller’s Taxes”):

     (i) all Taxes imposed on the Conveyed Companies with respect to all taxable periods of the Conveyed Companies that end on or before the Closing Date and all Income Taxes imposed on Seller, the Equity Selling Entities and the Asset Selling Entities;

     (ii) all Income Taxes imposed on the Conveyed Companies under any consolidation, combination, fiscal unity, or similar regime by any U.S. or foreign federal, state or local Tax Law for all taxable periods that end on or before the Closing Date;

     (iii) Seller’s portion of the Taxes for any Straddle Period, as determined under Section 7.3; and

     (iv) Seller’s share of the Transfer Taxes, as determined under Section 7.3.

provided, however, (i) Seller’s Taxes shall not include any Taxes arising as a result of actions taken by any Conveyed Company, Purchaser, or any of their Affiliates with respect to any Conveyed Company or any of the Purchased Assets after the effective time of the Closing, and (ii) Seller’s Taxes shall not include any liability for Taxes to the extent such Taxes are accrued Taxes described in Section 2.4(d).

          (b) The parties hereto acknowledge and agree that (i) in connection with the sale of shares of Tyco Electronics Dulmison (Thailand) Co., Ltd. none of Seller, the applicable Equity Selling Entities, Purchaser or its applicable Affiliate is organized in Thailand and, accordingly, neither Purchaser nor its applicable Affiliate shall be required to withhold Taxes otherwise imposed by Thailand upon the sale of said shares; (ii) in connection with the sale of shares of PT Dulmison Indonesia, and subject to Seller’s providing prior to Closing certificates of residency and statements confirming no permanent establishment in Indonesia of the applicable Equity Selling Entities, neither Purchaser nor its applicable Affiliate shall be required to withhold any Taxes otherwise imposed by Indonesia upon the sale of said shares; and (iii) neither Purchaser nor its applicable Affiliate is required to withhold any Taxes with respect to any other jurisdiction; provided, however, in the event of a receipt of a Tax Authority notice that any Taxes (other than Transfer Taxes) were required to be withheld, such Taxes shall be regarded as Seller’s Taxes.

          Section 7.2 Allocation of Taxes to Purchaser. Purchaser shall be responsible for, will pay or cause to be paid, and will indemnify Seller and its Affiliates from and against any and all Taxes, including Purchaser’s share of the Transfer Taxes, relating to the Conveyed Companies or the Purchased Assets, other than those allocated to Seller pursuant to Sections 7.1 and 7.3.

          Section 7.3 Allocation of Straddle Period Taxes.

          (a) With respect to any taxable period of a Conveyed Company relating to Taxes that would (absent an election) include, but not end until after, the Closing Date (a “Straddle Period”), Seller may or may cause one or more of the Conveyed Companies, at its sole option, to elect with any relevant Taxing Authority to close such Straddle Period as of the end of the Closing Date. As a result of such election, Taxes will be allocated to Seller, on the one hand, and Purchaser, on the other hand, pursuant to the provisions of Sections 7.1 and 7.2, respectively.

          (b) In any case where the Straddle Period of a Conveyed Company is not or cannot be closed pursuant to the preceding Section 7.3(a), Seller will be allocated any Income Taxes imposed on the Conveyed Company for the portion of the Straddle Period up to and including the Closing Date. For purposes of this Section 7.3(b), Income Taxes for the portion of a Straddle Period up to and including the Closing Date will be determined based upon an interim closing of the books of the Conveyed Company as of 11:59 p.m. on the Closing Date based upon Tax accounting methods, practices, and procedures last used by such Conveyed Company in preparing its Tax Returns.

          (c) As to any Tax other than an Income Tax or a Transfer Tax for any Straddle Period, Seller will be allocated:

     (i) for any such Tax that is determined based upon specific transactions (including, but not limited to, value added, sales, and use Taxes), all such Taxes applicable to transactions that have been consummated during the period through the end of the Closing Date; and

     (ii) for any such Tax that is not based upon specific transactions (including, but not limited to, license, real property, personal property, franchise and doing business Taxes), any such Tax equal to the full amount of such Tax for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of days in the Straddle Period ending on the Closing Date and the denominator of which is the number of days in the entire Straddle Period.

          (d) Other than Transfer Taxes related to the Purchased Assets located in Mexico (which will be borne solely by Purchaser), fifty (50) percent of all Transfer Taxes shall be borne by Seller and the remaining fifty (50) percent of all Transfer Taxes shall be borne by Purchaser.

          Section 7.4 Tax Returns; Payment of Taxes.

          (a) Except as set forth on Schedule 7.4(a) of the Seller Disclosure Letter, Seller shall, and shall cause the Equity Selling Entities, the Asset Selling Entities, and/or the Conveyed Companies to, prepare and file, or cause to be prepared and filed, within applicable statutory limits and consistent with prior practice, all Tax Returns of or which include the Conveyed Companies or the Purchased Assets (including any amendments thereto) that are due to be filed (giving effect to any extension of time to file) on or prior to the Closing Date. Seller shall, and shall cause the Equity Selling Entities and/or the Conveyed Companies to, pay all Taxes shown on such Tax Returns when due. To the extent that Seller or its Affiliates are required to file Tax Returns with respect to Transfer Taxes, Seller shall, and shall cause the Equity Selling Entities, the Asset Selling Entities, and/or the Conveyed Companies to, permit Purchaser to review and comment on the portion of any Tax Returns related to the determination of any Transfer Tax, and Seller shall, and shall cause the Equity Selling Entities, the Asset Selling Entities, and/or the Conveyed Companies to, make such revisions to such Tax Returns as are reasonably requested by Purchaser. Purchaser shall pay over to Seller, no fewer than three (3) Business Days prior to the due date of any such Transfer Tax Return, an amount of cash sufficient for the payment of any Taxes shown as due on such Tax Return and for which Purchaser bears responsibility pursuant to Section 7.2 hereof.

          (b) Purchaser shall, and shall cause its Affiliates to, prepare and file, or cause to be prepared and filed, all Tax Returns relating to the Conveyed Companies that are due to be filed (giving effect to any extensions of time to file) after the Closing Date, including Tax Returns for any taxable period ending on or prior to the Closing Date (a “Pre-Closing Period”). In preparing such Tax Returns, Purchaser shall not, and shall cause any of its Affiliates not to, make any changes to any position taken in any prior taxable year (unless required by applicable Law) that would adversely affect Seller or its Affiliates. Purchaser shall, and shall cause its Affiliates to, pay or cause to be paid, all Taxes with respect to such Tax Returns when due. Purchaser shall, and shall cause its Affiliates to permit Seller to review and comment on any Tax Returns of any of the Conveyed Companies that are filed after the Closing Date pursuant to which Seller is responsible for Taxes pursuant to Section 7.1 of this Agreement, and Purchaser shall, and shall cause its Affiliates to, make such revisions to such Tax Returns as are reasonably requested by Seller. Seller shall, and shall cause, as applicable, the Equity Selling Entities and/or the Asset Selling Entities to pay over to Purchaser, no fewer than three (3) Business Days prior to the due date of the applicable Tax Return, an amount of cash sufficient for the payment of any Taxes required to be shown as due on such Tax Return and for which Seller bears responsibility

pursuant to Section 7.1 of this Agreement. After Closing, Purchaser shall, and shall cause its Affiliates to, pay or cause to be paid, to Seller, no fewer than three (3) Business Days prior to the due date of the applicable Tax Return, an amount of cash equal to the excess of (i) the estimated Tax payments made by or on behalf of the applicable Conveyed Company on or prior to the Closing Date for the Tax Period to which such Tax Return relates over (ii) the amount of Taxes required to be shown as due on such Tax Return and for which Seller bears responsibility pursuant to Section 7.1 of this Agreement.

          (c) Purchaser agrees that, to the extent able to do so under applicable Law and requested to do so by Seller, Purchaser and any of its relevant Affiliates shall carry back any item of loss, deduction, or credit of the Conveyed Companies or Purchased Assets attributable to any taxable period with respect to which Seller is liable for Taxes pursuant to Section 7.1 hereof; provided, however, that nothing in this Section 7.4(c) or in any other provision of this Agreement shall require Purchaser or any of its relevant Affiliates to carry back any item of loss, deduction, or credit with respect to the Conveyed Companies or Purchased Assets arising from the operation of the Conveyed Companies or the Purchased Assets for periods following the Closing Date.

          (d) Purchaser agrees that, with respect to each Conveyed Company and any successor thereto:

          (i) except as provided in Section 7.7(d), neither Purchaser nor any of its Affiliates nor any successors thereto will file any claim for refund of Taxes in respect of (a) any taxable period ending on or before the Closing Date, or (b) in the case of a Straddle Period, the portion of such Straddle Period ending on the Closing Date;

          (ii) Purchaser, its Affiliates, and any successors thereto must make any elections available to them to waive the right to claim in respect of any taxable period ending on or before the Closing Date any carryback with respect to Taxes arising in (a) any taxable period beginning after the Closing Date, or (b) in the case of a Straddle Period, the portion of such Straddle Period beginning after the Closing Date;

          (iii) Purchaser, its Affiliates, and any successor thereto will refrain from making any affirmative elections to claim (a) in respect of any period ending on or before the Closing Date, or (b) in the case of a Straddle Period, the portion of such Straddle Period ending on the Closing Date, any carryback in respect of a Tax arising in (x) any period beginning after the Closing Date, or (y) in the case of a Straddle Period, the portion of such Straddle Period beginning after the Closing Date; and

          (iv) Neither Purchaser nor any of its Affiliates nor any successors thereto will file any amended Tax Return in respect of (A) any taxable period ending on or before the Closing Date, or (B) in the case of a Straddle Period, the portion of such Straddle Period ending on the Closing Date absent prior notice to, and written consent from, Seller (which consent shall not be unreasonably withheld).

          Section 7.5 Tax Contests.

          (a) Seller and Purchaser shall provide prompt notice to the other of any pending or threatened Contest of which it becomes aware related to Taxes for any taxable period for

which it is indemnified by the other Party hereunder. Such notice shall contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents it has received from any Taxing Authority in respect of any such matters. If a Party hereto has knowledge of an asserted Tax liability with respect to a matter for which it is to be indemnified under Section 7.6 hereof and such Party fails to give the indemnifying Party prompt notice of such asserted Tax liability, then (i) if the indemnifying Party is precluded from contesting the asserted Tax liability in any forum as a result of the failure to give prompt notice, the indemnifying Party shall have no obligation to indemnify the indemnified Party for any Taxes arising out of such asserted Tax liability, and (ii) if the indemnifying Party is not precluded from contesting such asserted Tax liability in any forum, but such failure to give prompt notice results in a monetary detriment to the indemnifying Party, then any amount that the indemnifying Party is otherwise required to pay the indemnified Party pursuant to Section 7.6 hereof shall be reduced by the amount of such detriment.

          (b) Seller or its designee shall have the right to represent a Conveyed Company’s interests in any Contest relating to a Tax matter arising with respect to a Pre-Closing Period to the extent such Contest is in connection with any Taxes for which Seller may be liable pursuant to Section 7.1 hereof, to employ counsel of its choice at its expense and to control the conduct of such Contest, including settlement or other disposition thereof.

          (c) Purchaser shall have the right to control the conduct of any Contest relating to a Tax matter of a Conveyed Company arising with respect to a taxable period ending after the Closing Date and of any Contest in respect of which Seller has not elected to represent the interests of a Conveyed Company pursuant to Section 7.5(b); provided, however, that Seller shall have the right, at Seller’s own expense, to consult with Purchaser regarding any such Contest that may affect a Conveyed Company for any Pre-Closing Period or for any portion of a Straddle Period ending on the Closing Date; and provided, further, that any settlement or other disposition of any such Contest that may affect a Conveyed Company for any Pre-Closing Period or any portion of a Straddle Period ending on the Closing Date may only be made with the consent of Seller, which consent will not be unreasonably withheld, delayed or conditioned. In the case of a Contest with respect to a Straddle Period, to the extent that Seller unreasonably withholds, delays or conditions consent, Purchaser’s obligation under Section 7.6(c) of this Agreement to indemnify Seller for any Tax with respect to such period shall terminate and Seller shall reimburse Purchaser for the reasonably incurred costs of the Contest. It is understood by the Parties that any disputes arising under this Section 7.5(c), including, but not limited to, disputes regarding consent being unreasonably withheld, delayed or conditioned, shall constitute disputes regarding matters in this Article VII that require the agreement of the Parties within the meaning of Section 7.10 of this Agreement and, therefore, shall be resolved in accordance with Section 7.10 of this Agreement.

          (d) Seller and Purchaser agree, in each case at no cost to the other Party, to cooperate with the other and the other’s Representatives in a prompt and timely manner in connection with any Contest. Such cooperation shall include, but not be limited to, making available to the other Party, during normal business hours, all books, records, Tax Returns, documents, files, other information (including working papers and schedules), officers or

employees (without substantial interruption of employment) or other relevant information necessary or useful in connection with any Contest requiring any such books, records and files.

          (e) Where there is a dispute with a Taxing Authority regarding liability for Tax for a Pre-Closing Period and for which Seller has an indemnification obligation, Purchaser shall, or shall cause the appropriate Conveyed Company to, as the case may be, at the request of the Seller, pay the amount of the disputed Tax to the Taxing Authority, and Purchaser or the Conveyed Company shall be reimbursed by Seller in a manner to be agreed upon by the Parties at such time as Seller makes such request.

          Section 7.6 Indemnification.

          (a) The indemnification provisions set forth in this Section 7.6 are the exclusive remedy for obligations of the Parties arising under this Agreement that relate to Taxes and Article VIII of this Agreement shall not apply to such obligations.

          (b) Seller shall be liable for, and covenants and agrees to indemnify and hold harmless Purchaser and its Affiliates from and against, any and all liabilities incurred by Purchaser or its Affiliates:

     (i) by reason of a breach of the representations contained in Section 3.15 hereof;

     (ii) by reason of a breach by Seller of any covenant contained in Article VII hereof; or

     (iii) for Taxes for which Seller bears responsibility pursuant to Section 7.1 hereof.

     (c) Purchaser shall be liable for, and covenants and agrees to indemnify and hold harmless Seller and its Affiliates from and against, any and all liabilities incurred by any of Seller or its Affiliates:

     (i) by reason of a breach by Purchaser of any covenant contained in Article VII hereof; or

     (ii) for Taxes for which Purchaser bears responsibility pursuant to Section 7.2 of this Agreement.

          (d) If a Party (the “Tax Indemnified Party”) determines that it or any of its Affiliates is or may be entitled to indemnification by another Party (the “Tax Indemnifying Party”) under Section 7.6(b) or 7.6(c) hereof, the Tax Indemnified Party will promptly deliver to the Tax Indemnifying Party a written notice and demand therefor (the “Tax Notice”) specifying the basis for indemnification and, if known, the amount for which the Tax Indemnified Party reasonably believes it or any of its Affiliates is entitled to be indemnified (a “Tax Claim”), together with any supporting documentation (including, if applicable, any relevant notice from any Taxing Authority). The Tax Notice must be received by the Tax Indemnifying Party no later than thirty (30) days before the expiration of the applicable Tax statute of limitations; provided,

however, that if the Tax Indemnified Party does not receive notice from the applicable Taxing Authority (“Taxing Authority Notice”) that an item exists that could give rise to a Tax Claim more than thirty (30) days before the expiration of the applicable Tax statute of limitations, then the Tax Notice must be received by the Tax Indemnifying Party as promptly as practicable after the Tax Indemnified Party receives the Taxing Authority Notice (but in no event more than five (5) Business Days after the Tax Indemnified Party receives the Taxing Authority Notice). If the Tax Indemnifying Party objects to the Tax Claim in the manner set forth in Section 7.6(e) hereof or if either the Tax Indemnifying Party or the Tax Indemnified Party exercises Contest rights as contemplated by Section 7.5(b), then the Tax Indemnifying Party shall not be liable to make an indemnification payment to the Tax Indemnified Party until there is a determination by the Accountant or a Final Determination regarding the Tax Claim, as the case may be, and any such indemnification payment will be paid by the Tax Indemnifying Party to the Tax Indemnified Party in the amount determined by the Accountant or in the Final Determination regarding the Tax Claim within thirty (30) days after the date of such determination or Final Determination, as the case may be. In all other cases, the Tax Indemnifying Party will pay the Tax Indemnified Party the amount set forth in the Tax Notice, in cash or other immediately available funds, within thirty (30) days after receipt of the Tax Notice; provided, however, that if the amount for which the Tax Indemnified Party reasonably believes it is entitled to be indemnified is not known at the time of the Tax Notice, the Tax Indemnifying Party shall pay the amount known to be due and the Tax Indemnified Party will deliver to the Tax Indemnifying Party a further Tax Notice specifying the unknown amount as soon as reasonably practicable after such amount is known and payment will then be made as set forth above.

          (e) The Tax Indemnifying Party may object to the Tax Claim (or the amount thereof) set forth in any Tax Notice by giving the Tax Indemnified Party, within thirty (30) days following receipt of such Tax Notice, written notice setting forth the Tax Indemnifying Party’s grounds for so objecting (the “Tax Objection Notice”). If the Tax Indemnifying Party does not give the Tax Indemnified Party the Tax Objection Notice within such thirty (30) day period, the Tax Indemnified Party may exercise any and all of its rights under applicable Law and this Agreement to collect such amount.

          (f) The amount of a Tax Claim shall be the amount of Taxes payable by the Tax Indemnified Party net of the present value of any anticipated benefit to the Tax Indemnified Party or any of its Affiliates attributable to any Tax item resulting from the facts underlying such Tax Claim.

          (g) If the Tax Indemnified Party and the Tax Indemnifying Party are unable to settle any dispute regarding a Tax Claim within thirty (30) days after receipt of the Tax Objection Notice, the Tax Indemnified Party and the Tax Indemnifying Party will, in accordance with Section 7.10, jointly request the Accountant to resolve the dispute as promptly as possible.

          (h) Failure by the Tax Indemnified Party to promptly deliver to the Tax Indemnifying Party a Tax Notice in accordance with Section 7.6(d) hereof will not relieve the Tax Indemnifying Party of any of its obligations under this Agreement except to the extent the Tax Indemnifying Party is prejudiced by such failure.

          (i) Each of the Parties, on behalf of itself and its Affiliates, agrees not to bring any actions or proceedings, at law, in equity or otherwise, against any other Party or its Affiliates, in respect of any breaches or alleged breaches of any representation, warranty or other provision of this Article VII, except pursuant to and subject to the express provisions of this Section 7.6.

          Section 7.7 Refunds.

          (a) Purchaser shall, and shall cause its Affiliates to, hold in trust for the benefit of Seller all refunds (including interest paid thereon by a Governmental Authority and any amounts applied against a Tax liability for which Purchaser would not be entitled to indemnification pursuant to this Agreement) of any Taxes for which Purchaser would be entitled to indemnification pursuant to this Agreement (“Seller’s Refunds”), and, within five (5) Business Days after receipt by Purchaser or any of its Affiliates of any such Seller’s Refund, Purchaser or its Affiliate, as applicable, shall pay over to Seller the amount of such Seller’s Refund without right of set off or counterclaim. For the avoidance of doubt, Seller’s Refunds include any value added Tax refunds payable to Tyco Electronics Dulmision (Thailand) Co. Ltd for taxable periods (or portions thereof) ending on or before the Closing Date, whether actually paid to Tyco Electronics Dulmision (Thailand) Co. Ltd or credited against its Tax liability for taxable periods (or portions thereof) after the Closing Date.

          (b) Seller shall, and shall cause its Affiliates to, hold in trust for the benefit of Purchaser and its Affiliates all refunds (including interest paid thereon by a Governmental Authority and any amounts applied against a Tax liability for which Seller would not entitled to indemnification pursuant to this Agreement) of any Taxes for which Seller would be entitled to indemnification pursuant to this Agreement (“Purchaser’s Refunds”) and, within five (5) Business Days of receipt by Seller or any of its Affiliates of any such Purchaser’s Refund, Seller or and its Affiliate, as applicable, shall pay over to Purchaser the amount of Purchaser’s Refund without right of set off or counterclaim.

          (c) Upon the request of Seller, Purchaser will file, or cause a Conveyed Company or its Affiliate to file, claims for Seller’s Refunds, in such form as Seller may reasonably request; provided, however, that the filing of any such claim will not result in any prejudice to Purchaser or its Affiliates. Seller will have the sole right to prosecute any claims for Seller’s Refunds (by suit or otherwise) at Seller’s expense and with counsel of Seller’s choice. Purchaser will cooperate, and cause the appropriate Conveyed Company or Affiliate to cooperate, fully, at Seller’s expense, with Seller and its counsel in connection therewith.

          (d) Upon the request of Purchaser, Seller shall and shall cause its Affiliates to file, claims for Purchaser’s Refunds, in such form as Purchaser may reasonably request; provided, however, that the filing of any such claim will not result in any prejudice to Seller or its Affiliates. Purchaser will have the sole right to prosecute any claims for Purchaser’s Refunds (by suit or otherwise) at Purchaser’s expense and with counsel of Purchaser’s choice. Seller will cooperate, and cause its Affiliates to cooperate, fully, at Purchaser’s expense, with Purchaser and its counsel in connection therewith.

          (e) Except as provided in Sections 7.7(a) and 7.7(b) hereof, any refunds of Taxes other than Seller’s Refunds and Purchaser’s Refunds will be the property of the payee of such refunds and no other Party nor any of its Affiliates will have any right to such refunds.

          (f) To the extent reasonably requested by Seller, and within (30) days of such request, Purchaser and its Affiliates shall grant to Seller appropriate powers of attorney as may reasonably be necessary to prosecute or defend its rights hereunder.

          Section 7.8 Assistance and Cooperation. After the Closing Date, Seller and Purchaser shall cooperate (and shall cause their respective Affiliates to cooperate) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with Tax matters relating to the Conveyed Companies and the Purchased Assets, including (i) the preparation and filing of Tax Returns, (ii) determining the liability for and amount of any Taxes due or the right to and amount of any refund of Taxes, (iii) examinations of Tax Returns, (iv) any administrative or judicial proceedings in respect of Taxes assessed or proposed to be assessed and (v) Purchaser’s filing of an election under Section 338(g) of the Code with respect to a Conveyed Company. Such cooperation shall include making all information and documents in their possession related to the Business available to the other, as provided in Section 7.9 hereof. Seller and Purchaser also shall (and shall cause their respective Affiliates to) make available to the other, as reasonably requested and available, personnel responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes. Any information or documents provided under this Section 7.8 shall be kept confidential by the Party receiving the information or documents, except as may otherwise be necessary in connection with the filing of Tax Returns or in connection with any administrative or judicial proceedings relating to Taxes.

          Section 7.9 Tax Records. Tax records (“Tax Records”) in possession of Seller (other than those included in the Excluded Assets) and/or the Equity Selling Entities relating to the Conveyed Companies shall be transferred to Purchaser. Seller shall endeavor to transfer all records relating to the business operations of the Conveyed Companies, excluding backup tapes, (“Business Records”). Seller may make and retain copies of such Tax Records and Business Records. Seller, Purchaser, and their respective Affiliates shall make available to each other (at no cost to the requesting Party) for inspection and copying during normal business hours upon reasonable notice all Tax Records and Business Records in their possession relating to the Conveyed Companies and the Purchased Assets to the extent reasonably required by the other Party in connection with the preparation of Tax Returns, resolution of items under this Article VII, or other audits, disputes or litigation. Seller, Purchaser, and their respective Affiliates shall preserve and keep such Tax Records and Business Records in their possession until the expiration of any applicable statutes of limitation and as otherwise required by Law, but in any event for a period of not less than ten (10) years after the Closing Date.

          Section 7.10 Dispute Resolution. If Seller and Purchaser fail to agree on the resolution of any of the matters in this Article VII that require the agreement of the Parties or otherwise disagree about the proper interpretation or operation of any provision of this Article VII, then such matter shall be referred to the Accountant for binding arbitration. Seller and Purchaser shall deliver to the Accountant copies of any schedules or documentation that may reasonably be required by the Accountant to make its determination. Each of Purchaser and Seller shall be entitled to submit to the Accountant a memorandum setting forth its position with

respect to such arbitration. The Accountant shall render a determination within sixty (60) days of the referral of such matter for binding arbitration. Seller or Purchaser, as the case may be, shall pay to the other Party the amount determined by the Accountant within ten (10) days of the date on which the Accountant makes its determination. Notwithstanding any provision of this Section 7.10, the Accountant may, at its sole discretion, amend the procedures contained herein. The determination of the Accountant shall be final and binding on all Parties. The costs incurred in retaining the Accountant shall be shared equally, fifty percent (50%) by the Seller and fifty percent (50%) by Purchaser.

          Section 7.11 Payment. All amounts required to be paid to a Party under this Article VII shall be paid in Dollars and translated from local currency at the spot rate. If a Party (the “Payor”) fails to make a payment due and owing under this Article VII to the other Party or any of its Affiliates (the “Payee”) within thirty (30) days of the date prescribed by this Article VII, the Payor will pay to the Payee interest (such interest to be calculated on the basis of a year of 360 days and the actual number of days elapsed) on such payment from and including the date on which such payment was due, but excluding the day the Payor makes such payment, at a rate equal to eight percent (8%) per annum.

          Section 7.12 Termination of Tax Allocation Agreements. Immediately prior to the close of business on the Closing Date, (i) all Tax allocation or sharing agreements or arrangements existing between any of the Seller and the Equity Selling Entities, on the one hand, and any of the Conveyed Companies, on the other hand, shall be terminated; and (ii) amounts due under such agreements or arrangements shall be settled as of the Closing Date in such manner as Seller shall determine (including capitalization or distribution of amounts due or receivable under such agreements or arrangements). Upon such termination and settlement, no further payments by or to the Conveyed Companies with respect to such agreements or arrangements shall be made, and all other rights and obligations resulting from such agreements or arrangements between the Conveyed Companies and others shall cease at such time.

          Section 7.13 Adjustment. All amounts paid, or caused to be paid, by one Party or its Affiliates to another Party or its Affiliates pursuant to this Agreement (other than interest in accordance with Section 7.11 hereof, but including amounts payable under Article VIII hereof) shall be treated by the Parties as an adjustment to the Gross Asset Purchase Price or Gross Equity Purchase Price, as applicable, to the extent permitted by Law.

          Section 7.14 Survival of Representations and Warranties Relating to Taxes. The respective representations and warranties of Seller contained in Section 3.15 (Taxes) shall survive until thirty (30) days after the expiration of the applicable statute of limitations.

ARTICLE VIII

SURVIVAL; INDEMNIFICATION

          Section 8.1 Survival of Representations and Warranties.

          (a) The respective representations and warranties of Seller and Purchaser contained in Articles III and IV (other than Section 3.15 relating to Taxes which is addressed by

Article VII exclusively) shall survive the date hereof until the date that is eighteen (18) months from the Closing Date, except that the following representations and warranties shall survive until thirty (30) days after the expiration of the relevant statute of limitations: Section 3.1 (Organization and Qualification), Section 3.3(b) (Capital Structure) and the first sentence of Section 3.20 (Title).

          (b) Neither Seller nor Purchaser shall have any liability whatsoever with respect to any representation and warranty unless a claim is made hereunder prior to the expiration of the applicable survival period for such representation and warranty, in which case such representation and warranty shall survive as to such claim until such claim has been finally resolved.

          Section 8.2 Indemnification by Seller. Subject to the limitations set forth in this Article VIII, including Section 8.6 hereof, after the Closing, Seller agrees to defend and indemnify Purchaser, its Affiliates and each of their respective officers and directors (the "Purchaser Indemnitees”) and save and hold each of them harmless against any Losses incurred by them as a result of: (a) any failure of any representation or warranty made by Seller contained in Article III (other than Section 3.15 relating to Taxes, which is addressed by Article VII exclusively) to be true and correct on and as of the Closing Date; (b) any breach of any covenant or agreement by Seller contained in this Agreement (other than covenants contained in Article VII, which are addressed by Article VII exclusively); and (c) any Retained Liability.

          Section 8.3 Indemnification by Purchaser. Subject to the limitations set forth in this Article VIII, including Section 8.6 hereof, after the Closing, Purchaser agrees to defend and indemnify Seller and its Affiliates and each of their respective officers and directors (“Seller Indemnitees”) and save and hold each of them harmless against any Losses incurred by them as a result of: (a) any failure of any representation or warranty made by Purchaser contained in Article IV to be true and correct on and as of the Closing Date; (b) any breach of any covenant or agreement by Purchaser contained in this Agreement (other than covenants contained in Article VII which are addressed by Article VII exclusively); (c) any Assumed Liability or any Liability of a Conveyed Company (except for any Liability that is a Retained Liability); (d) operation of the Business or use of the Purchased Assets by Purchaser, its Affiliates, the Conveyed Companies, or any of their respective successors or assigns from and after the Closing Date; and (e) any Parent Guarantee that remains outstanding after the Closing.

          Section 8.4 Limitation on Indemnification, Mitigation.

          (a) Liability of the Seller. Notwithstanding anything to the contrary in this Agreement:

     (i) The Seller’s maximum aggregate amount of indemnifiable Losses which may be recovered by Purchaser Indemnitees for indemnification pursuant to Section 8.2(a) will not exceed $2,400,000.00, except for Losses resulting from a failure of any representation or warranty made by Seller in Section 3.21 (“Identified Losses”), for which Seller’s maximum aggregate amount of indemnifiable Losses shall not exceed 8,000,000.

     (ii) The Seller’s maximum aggregate amount of indemnifiable Losses which may be recovered by Purchaser Indemnitees for indemnification pursuant to Sections 8.2(a) and 8.2(b) together will not exceed $16,000,000.00.

     (iii) Seller shall not be liable for any claim for indemnification pursuant to Section 8.2(a) (A) other than for Identified Losses, for any individual item where the Loss relating thereto is less than $10,000 (the “Per-Claim Deductible”), and (B) in respect of each individual item where the Loss relating thereto is equal to or greater than the Per-Claim Deductible, unless and until the aggregate amount of all such indemnifiable Losses which may be recovered from Seller equals or exceeds $320,000.00 (the “Threshold”), in which case Seller shall be liable only for the amount of the Losses that exceed $160,000.00 (the “Deductible”), provided, that the Deductible shall not apply to any Identified Losses once the Threshold is met.

     (iv) Purchaser shall take and shall cause its Affiliates to take all commercially reasonable steps to mitigate any Loss upon becoming aware of any event which would reasonably be expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach which gives rise to the Loss.

     (v) Notwithstanding any provision in this Agreement, in the event of a claim for breach of Section 3.9, the parties hereto agree that any remediation shall be required to meet standards applicable to industrial property as of the Closing Date; remediation to subsequently enacted standards or to standards more stringent than those applicable to industrial uses shall not be required but may be pursued at Purchaser’s sole expense at Purchaser’s request.

          (b) Liability of Purchaser. Notwithstanding anything to the contrary in this Agreement:

     (i) Purchaser’s maximum aggregate amount of indemnifiable Losses which may be recovered by Seller Indemnitees for indemnification pursuant to Section 8.3(a) will not exceed $2,400,000.00.

     (ii) Purchaser’s maximum aggregate amount of indemnifiable Losses which may be recovered by Seller Indemnitees for indemnification pursuant to Sections 8.3(a) and 8.3(b) together will not exceed $16,000,000.00.

     (iii) Purchaser shall not be liable for any claim for indemnification pursuant to Section 8.3(a) (A) for any individual item where the Loss relating thereto is less than the Per-Claim Deductible, and (B) in respect of each individual item where the Loss relating thereto is equal to or greater than the Per-Claim Deductible, unless and until the aggregate amount of all such indemnifiable Losses which may be recovered from Purchaser, equals or exceeds the Threshold, in which case Purchaser shall be liable only for the amount of the Losses that exceed the Deductible.

     (iv) Seller shall take and shall cause its Affiliates to take all commercially reasonable steps to mitigate any Loss upon becoming aware of any event which would

reasonably be expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach which gives rise to the Loss.

          Section 8.5 Losses Net of Insurance, Etc. The amount of any Loss for which indemnification is provided under Section 8.2 or 8.3 shall be net of (i) any accruals or reserves included in the determination of the Closing Date Working Capital, (ii) any amounts recovered by the Indemnified Party pursuant to any indemnification by, or indemnification agreement with, any third party, (iii) any insurance proceeds or other cash receipts or sources of reimbursement received as an offset against such Loss (each Person named in clauses (ii) and (iii), a “Collateral Source”), and (iv) an amount equal to the present value of any anticipated Tax benefit attributable to such Loss. The Indemnifying Party, following its payment of the applicable indemnification amount pursuant to this Agreement, may require an Indemnified Party to assign the rights to seek recovery pursuant to the preceding sentence; provided, however, that the Indemnifying Party will then be responsible for pursuing such claim at its own expense. If the amount to be netted hereunder in connection with a Collateral Source from any payment required under Section 8.2 or 8.3 is determined after payment by the Indemnifying Party of any amount otherwise required to be paid to an Indemnified Party pursuant to this Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article VIII had such determination been made at the time of such payment. Notwithstanding anything herein to the contrary, in no event shall “Losses” be calculated based upon any multiple of lost earnings or other similar methodology used to value the Business, the Purchased Assets, the Assumed Liabilities or the Conveyed Companies or based on the financial performance or results of operations of the Business, the Purchased Assets, the Assumed Liabilities or the Conveyed Companies.

          Section 8.6 Indemnification Procedure.

          (a) Promptly after the incurrence of any Losses by any Person entitled to indemnification pursuant to Article VIII (an “Indemnified Party”), including any claim by a third party described in Section 8.7, which might give rise to indemnification hereunder, the Indemnified Party shall deliver to the Party from which indemnification is sought (the “Indemnifying Party”) a certificate (the “Claim Certificate”), which Claim Certificate shall:

     (i) state that the Indemnified Party has paid or anticipates it will incur Losses for which such Indemnified Party is entitled to indemnification pursuant to this Agreement; and

     (ii) specify in reasonable detail (and have annexed thereto any supporting documentation, including any correspondence in connection with any Third-Party Claim and paid invoices for claimed Losses) each individual item of Loss included in the amount so stated, the date such item was paid or accrued, the basis for any anticipated liability and the nature of the misrepresentation, breach of warranty, breach of covenant or claim to which each such item is related and the computation of the amount to which such Indemnified Party claims to be entitled hereunder. The failure of an Indemnified Party to give reasonably prompt notice of any claim shall not release, waive or otherwise

affect the Indemnifying Party’s obligations with respect thereto except to the extent that the Indemnifying Party is materially prejudiced as a result of such failure.

          (b) In the event that the Indemnifying Party shall object to the indemnification of an Indemnified Party in respect of any claim or claims specified in any Claim Certificate, the Indemnifying Party shall, within thirty (30) days after receipt by the Indemnifying Party of such Claim Certificate, deliver to the Indemnified Party a notice of objection to such effect, specifying in reasonable detail the basis for such objection, and the Indemnifying Party and the Indemnified Party shall, within the forty-five (45) day period beginning on the date of receipt by the Indemnified Party of such objection, attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims to which the Indemnifying Party shall have so objected. If the Indemnified Party and the Indemnifying Party shall succeed in reaching agreement on their respective rights with respect to any of such claims, the Indemnified Party and the Indemnifying Party shall promptly prepare and sign a memorandum setting forth such agreement. Should the Indemnified Party and the Indemnifying Party be unable to agree as to any particular item or items or amount or amounts within such time period, then the Indemnified Party shall be permitted to submit such dispute to a court of competent jurisdiction as set forth in Section 10.10.

          (c) Claims for Losses covered by a memorandum of agreement of the nature described in Section 8.6(b) and claims for Losses the validity and amount of which have been the subject of judicial determination as described in Section 8.6(b) or shall have been settled with the consent of the Indemnifying Party, as described in Section 8.7, are hereinafter referred to, collectively, as “Agreed Claims.” Within ten (10) Business Days of the determination of the amount of any of the Agreed Claims, the Indemnifying Party shall pay to the Indemnified Party an amount equal to the Agreed Claim by wire transfer in immediately available funds to the bank account or accounts designated by the Indemnified Party in a notice to the Indemnifying Party not less than two (2) Business Days prior to such payment.

          Section 8.7 Third-Party Claims.

          (a) If a claim by a third party is made against any Indemnified Party with respect to which the Indemnified Party intends to seek indemnification hereunder for any Loss under this Article VIII, the Indemnified Party shall promptly notify the Indemnifying Party of such claim. The Indemnifying Party shall have the right, but not the obligation, to conduct and control, through counsel of its choosing reasonably acceptable to the Indemnified Party, any third party claim, action, suit or proceeding (a “Third-Party Claim”) provided that it gives notice within thirty (30) days of its receipt of notice from the Indemnified Party, of its intent to do so. Failure to give notice shall give the Indemnified Party the sole right to conduct and control such Third-Party Claim. If the Indemnifying Party elects to control a Third Party Claim in accordance with this Section 8.7, the Indemnifying Party may compromise or settle the same; provided, however, that the Indemnifying Party shall give the Indemnified Party advance notice of any proposed compromise or settlement and shall not enter into any such compromise or agreement that does not include a full release of the Indemnified Party from all liability in connection with the portion of that Third Party Claim that is indemnifiable hereunder, unless the Indemnified Party consents thereto in its sole discretion.

          (b) No Indemnified Party may compromise or settle any Third-Party Claim for which it is seeking indemnification hereunder without the written consent of the Indemnifying Party. The Indemnifying Party shall permit the Indemnified Party to participate in, but not control, the defense of any such action or suit through counsel chosen by the Indemnified Party; provided, however, that the fees and expenses of such counsel shall be borne by the Indemnified Party. If the Indemnifying Party elects not to control or conduct the defense or prosecution of a Third-Party Claim, the Indemnifying Party nevertheless shall have the right to participate in the defense or prosecution of any Third-Party Claim and, at its own expense, to employ counsel of its own choosing for such purpose. An Indemnifying Party will lose any previously acquired right to control the defense of any Proceeding if for any reason the Indemnifying Party ceases to actively, competently and diligently conduct the defense.

          (c) The Parties shall cooperate in the defense or prosecution of any Third-Party Claim, with such cooperation to include (i) the retention and the provision of the Indemnifying Party records and information that are reasonably relevant to such Third-Party Claim, and (ii) the making available of employees on a mutually convenient basis for providing additional information and explanation of any material provided hereunder.

          Section 8.8 Sole Remedy/Waiver. The Parties acknowledge and agree that, in the event that the Closing occurs:

          (a) the sole and exclusive remedy of any Purchaser Indemnitee with respect to any and all Losses arising in connection with the representations, warranties and covenants set forth in this Agreement will be pursuant to the indemnification obligations set forth in Section 7.6 and Section 8.2; and

          (b) the sole and exclusive remedy of any Seller Indemnitee with respect to any and all Losses arising in connection with the representations, warranties and covenants set forth in this Agreement will be pursuant to the indemnification obligations set forth in Section 7.6 and Section 8.3.

In furtherance of the foregoing, the Parties hereby waive, effective upon the occurrence of the Closing, to the fullest extent permitted by applicable Law, any and all other rights, claims and causes of action (including rights of contribution, if any, and claims for rescission) known or unknown, foreseen or unforeseen, which exist or may arise in the future, that it may have against the Seller or any of its Affiliates or Representatives, any member of the board of directors of any Conveyed Company, or Purchaser or any of its Affiliates or Representatives, as the case may be, arising under or based upon any Law (including any such Law relating to environmental matters or arising under or based upon any securities Law, common law or otherwise) for any misrepresentation or breach of the warranties or covenants contained in this Agreement. Notwithstanding anything herein to the contrary, the provisions of this Section 8.8 shall not apply to claims for fraud or intentional misrepresentation.

          Section 8.9 Other Limitations. No claim for misrepresentation or breach of warranty shall be made by any Purchaser Indemnitee if the facts constituting the misrepresentation or breach of warranty were actually known by any of the persons set forth on Schedule 8.9 of the Seller Disclosure Letter. No claim for misrepresentation or breach of

warranty shall be made by any Seller Indemnitee if the facts constituting the misrepresentation or breach of warranty were actually known by any of the persons set forth on Schedule 1.4(a) of the Seller Disclosure Letter.

ARTICLE IX

TERMINATION

          Section 9.1 Termination. This Agreement may be terminated at any time prior to the Closing:

          (a) by written agreement of Purchaser and Seller;

          (b) by either Purchaser or Seller, by giving written notice of such termination to the other Party, if the Closing shall not have occurred on or prior to April 22, 2010 (the “End Date”) (unless the failure to consummate the Closing by such date shall be due to the failure of the Party seeking to terminate this Agreement to have fulfilled any of its obligations under this Agreement);

          (c) by either Purchaser or Seller if any court of competent jurisdiction or other competent Governmental Authority shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such Order or other action shall have become final and nonappealable;

          (d) by Purchaser if any of the representations or warranties of Seller contained in this Agreement are inaccurate or untrue to the extent that any such inaccuracy or untruth would cause the failure of the condition set forth in Section 6.2(b) or if Seller has failed to discharge and fulfill any of its covenants or agreements contained in this Agreement to the extent that any such failure would cause the failure of the condition set forth in Section 6.2(a), and such inaccuracy or failure has not been cured within thirty (30) days after written notice of such failure, inaccuracy or untruth has been given to Seller; or

          (e) by Seller if any of the representations or warranties of Purchaser contained in this Agreement are inaccurate or untrue to the extent that any such inaccuracy or untruth would cause the failure of the condition set forth in Section 6.3(b) or if Purchaser has failed to discharge and fulfill any of its covenants or agreements contained in this Agreement to the extent that any such failure would cause the failure of the condition set forth in Section 6.3(a), and such inaccuracy or failure has not been cured within thirty (30) days after written notice of such failure, inaccuracy or untruth has been given to Purchaser.

          Section 9.2 Effect of Termination.

          (a) In the event of the termination of this Agreement in accordance with Section 9.1, this Agreement shall thereafter become void and have no effect, and no Party shall have any Liability to the other Party or their respective Affiliates, directors, officers or employees except for the obligations of the Parties contained in this Section 9.2 and in Section 5.1 (“Information and Documents”), Section 5.17 (“Confidentiality”), Section 10.1 (“Notices”), Section 10.4 (“Entire Agreement”), Section 10.6 (“Public Disclosure”), Section 10.7 (“Return of

Information”), Section 10.8 (“Expenses”) and Section 10.10 (“Governing Law; Jurisdiction; Waiver of Jury Trial; Limitation of Liability”) and except that nothing herein will relieve any Party from Liability for any willful and intentional breach of any covenant or any representation and warranty set forth in this Agreement prior to such termination.

          (b) If this Agreement is terminated in accordance with Section 9.1, Purchaser agrees that the prohibition in the Confidentiality Agreement restricting Purchaser’s ability to solicit any Business Employees to join the employ of Purchaser or any of its Affiliates shall be extended to a period of three (3) years from the date of such termination.

ARTICLE X

MISCELLANEOUS

          Section 10.1 Notices. Except as otherwise expressly provided in this Agreement, any notice or other communication required or permitted under this Agreement shall be in writing and deemed to have been duly given (i) five (5) Business Days following deposit in the mails if sent by registered or certified mail, postage prepaid, (ii) when sent, if sent by facsimile transmission and if receipt thereof is confirmed by machine generated receipt, (iii) when delivered, if delivered personally to the intended recipient and (iv) two (2) Business Days following deposit with a nationally recognized overnight courier service, in each case addressed as follows:

To Seller:

Tyco Electronics Ltd.
1050 Westlakes Drive
Berwyn, Pennsylvania 19312
Attn: General Counsel
Facsimile: +1 (610) 893-9602

and

Tyco Electronics Ltd.
21 Lowder Street
Dedham, Massachusetts 02026
Attn: Jeanne Quirk
Facsimile: +1 (617) 848-0630

with a copy (which shall not constitute notice) to:

Baker & McKenzie LLP
2 Embarcadero Center, 11th Floor
San Francisco, California 94111
Attn: Shane M. Byrne
Facsimile: +1 (415) 576-3099

To Purchaser:

Preformed Line Products Co.
660 Beta Drive
Mayfield Village, Ohio 44143
Attn: General Counsel
Facsimile: +1(440) 473-9162

with a copy (which shall not constitute notice) to:

Baker & Hostetler
3200 National City Center
Cleveland, Ohio 44114-3485
Attn: Robert Weible
Facsimile: +1 (216) 696-0740

          Section 10.2 Amendment; Waiver. Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Purchaser and Seller or, in the case of a waiver, by the Party against whom the waiver is to be effective. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

          Section 10.3 Assignment. No Party to this Agreement may assign any of its rights or obligations under this Agreement without the prior written consent of the other Party, provided, that Purchaser may assign its rights and obligations hereunder to any wholly-owned subsidiary of Purchaser without the consent of the Seller if Purchaser shall continue to be liable for all such obligations.

          Section 10.4 Entire Agreement. This Agreement (including all Schedules and Exhibits and the Seller Disclosure Letter) contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters except for (i) the Confidentiality Agreement which will remain in full force and effect for the term provided for therein if this Agreement is terminated in accordance with Section 9.1 and (ii) any written agreement of the Parties that expressly provides that it is not superseded by this Agreement.

          Section 10.5 Parties in Interest. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to confer upon any Person other than the Parties or their successors or permitted assigns any rights or remedies under or by reason of this Agreement; provided, however, that the Conveyed Company Covered Persons shall be third-party beneficiaries of the obligations of Purchaser set forth in Section 5.12 and any Affiliates of Seller that have provided Parent Guarantees shall be third-party beneficiaries of the obligations of Purchaser set forth in Section 5.13.

          Section 10.6 Public Disclosure. Notwithstanding anything herein to the contrary, each of Purchaser and Seller agrees that, except as may be required to comply with the requirements of any applicable Laws and the rules and regulations of any stock exchange upon which the securities of such Party is listed, if any, no press release or similar public announcement or communication shall be made concerning the execution or performance of this Agreement unless the Parties shall have consulted in advance with respect thereto.

          Section 10.7 Return of Information. If for any reason whatsoever the transactions contemplated by this Agreement are not consummated, Purchaser shall promptly return to Seller or certify to the destruction of, all books and records furnished by Seller, any other Seller Entity, any Conveyed Company or any of their respective Affiliates, agents, employees, or representatives (including all copies, summaries and abstracts, if any, thereof) in accordance with the terms of the Confidentiality Agreement.

          Section 10.8 Expenses. Except as otherwise expressly provided in this Agreement, whether or not the transactions contemplated by this Agreement are consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the Party incurring such expenses.

          Section 10.9 Schedules. The disclosure of any matter in any Schedule of the Seller Disclosure Letter shall be deemed to be a disclosure for all purposes of this Agreement, but shall expressly not be deemed to constitute an admission by Seller, or to otherwise imply, that any such matter is material for the purposes of this Agreement.

          Section 10.10 Governing Law; Waiver of Jury Trial; Limitation of Liability.

          (a) This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, without regard to the conflicts of law principles of such state.

          (b) EACH OF PURCHASER AND SELLER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION AS BETWEEN THE PARTIES DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING HERETO. EACH OF PURCHASER AND SELLER (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10(b).

          (c) The Parties agree that the prevailing party or parties, as the case may be, in any Action shall be entitled to reimbursement of all costs of litigation, including reasonable attorneys’ fees, from the non-prevailing party. For purposes of this Section 10.10(d), each of the “prevailing party” and the “non-prevailing party” in any Action shall be the party designated as

such by the court or other appropriate official presiding over such Action, such determination to be made as a part of the judgment rendered thereby..

          (d) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, IN NO EVENT WILL ANY PARTY OR ANY OF ITS AFFILIATES BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION, LOST PROFITS, LOSS OF REVENUE OR LOST SALES) IN CONNECTION WITH ANY CLAIMS, LOSSES, DAMAGES OR INJURIES ARISING OUT OF THE CONDUCT OF SUCH PARTY PURSUANT TO THIS AGREEMENT REGARDLESS OF WHETHER THE NONPERFORMING PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR NOT. FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS PROVISION SHALL AFFECT ANY PARTY’S OBLIGATIONS UNDER THIS AGREEMENT WITH RESPECT TO TAXES.

          Section 10.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that all Parties need not sign the same counterpart.

          Section 10.12 Headings. The heading references herein and the table of contents hereto are for convenience purposes only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

          Section 10.13 No Strict Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by all Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.

          Section 10.14 Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof, so long as the continued enforceability of the other provisions would not produce an inequitable result. If any term or other provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid, illegal or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity, illegality or unenforceability, nor shall such invalidity, illegality or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction, so long as the continued enforceability of those other provisions would not produce an inequitable result.

          Section 10.15 Specific Performance. The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to an injunction or injunctions to prevent breaches of

this Agreement or to enforce specifically the performance of the terms and provisions hereof in addition to any other remedy to which they are entitled at law or in equity.

          IN WITNESS WHEREOF, the Parties have executed or caused this Agreement to be executed as of the date first written above.

TYCO ELECTRONICS GROUP S.A.
By:	/s/ Terrance Curtin
	Name:	Terrence Curtin
	Title:	Executive Vice President and Chief Financial Officer
PREFORMED LINE PRODUCTS COMPANY
By:	/s/ Robert G. Ruhlman
	Name:	Robert G. Ruhlman
	Title:	Chief Executive Officer and President

EX-21

Exhibit 21

PREFORMED LINE PRODUCTS COMPANY

SUBSIDIARIES

Domestic Subsidiaries:

     Direct Power and Water Corporation

Albuquerque, New Mexico

Foreign Subsidiaries:

     Australia

Preformed Line Products (Australia) Ltd.

Sydney, Australia

     Brazil

PLP-Produtos Para Linhas Preformados Ltd.

Sao Paulo, Brazil

     Canada

Preformed Line Products (Canada) Ltd.

Cambridge, Ontario, Canada

     China

Beijing PLP Conductor Line Products Co., Ltd.

Beijing, China

     Indonesia

PT Dulmison Indonesia

Bekasi, Indonesia

     Malaysia

Preformed Line Products (Malaysia) Snd. Bhd

Selangor, Malaysia

     Mexico

Preformados de Mexico S.A. de C.V.

Queretaro, Mexico

     Poland

PLP-Belos SA

Beilsko-Biala, Poland

     South Africa

Preformed Line Products (South Africa) Pty. Ltd.

Pietermaritzburg, Natal

Republic of South Africa

     Spain

APRESA — PLP Spain, S. A.

Sevilla, Spain

     Thailand

Preformed Line Products (Asia) Ltd.

Bangkok, Thailand

Preformed Line Products (Thailand) Ltd.

Bangkok, Thailand

     United Kingdom

Preformed Line Products (Great Britain) Ltd.

Andover, Hampshire, England

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-73692) pertaining to the Salaried Employees’ Profit Sharing Plan of Preformed Line Products Company, in the Registration Statement (Form S-8 No. 333-73690) pertaining to the 1999 Employee Stock Option Plan of Preformed Line Products Company, and in the Registration Statement (Form S-8 No. 333-153263) pertaining to the Long Term Incentive Plan of 2008 of Preformed Line Products Company of our reports dated March 15, 2010, with respect to the consolidated financial statements and schedule of Preformed Line Products Company, and the effectiveness of internal control over financial reporting of Preformed Line Products Company included in this Annual Report on Form 10-K for the year ended December 31, 2009.

/s/ Ernst & Young LLP

Cleveland, Ohio
March 15, 2010

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-73692 on Form S-8 for the Preformed Line Products Company Salaried Employees’ Profit Sharing Plan, in Registration Statement No. 333-73690 on Form S-8 for the Preformed Line Products Company 1999 Employee Stock Option Plan and in Registration Statement No. 333-153263 on Form S-8 for the Preformed Line Products Company Long Term Incentive Plan of 2008 of our report relating to the financial statements and financial statement schedule of Preformed Line Products Company dated April 4, 2008 (March 13, 2009 as to the retrospective effects of the discontinued operations and change in reportable segments, described in Note N, and March 15, 2010 as to the Company’s change in method of accounting for noncontrolling interests, described in Note A) (which report expresses an unqualified opinion and includes an explanatory paragraph regarding the adoption of a new accounting standard in 2009), appearing in this Annual Report on Form 10-K of Preformed Line Products Company for the year ended December 31, 2009.

/s/ Deloitte & Touche LLP

Cleveland, Ohio
March 15, 2010

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert G. Ruhlman, certify that:

1. I have reviewed this annual report on Form 10-K of Preformed Line Products Company;

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 officer 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we 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 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 officer 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 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: March 15, 2010

/s/ Robert G. Ruhlman      Robert G. Ruhlman      Chairman, President and Chief Executive Officer
     (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Eric R. Graef, certify that:

1. I have reviewed this annual report on Form 10-K of Preformed Line Products Company;

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 officer 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we 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 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 officer 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 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: March 15, 2010

/s/ Eric R. Graef      Eric R. Graef
     Chief Financial Officer and Vice President — Finance      (Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert G. Ruhlman, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Annual Report on Form 10-K of Preformed Line Products Company for the period ended December 31, 2009 which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange 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 Preformed Line Products Company.

March 15, 2010	/s/ Robert G. Ruhlman
	Robert G. Ruhlman
	Chairman, President and Chief Executive Officer      (Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Preformed Line Products Company and will be retained by Preformed Line Products Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Eric R. Graef, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Annual Report on Form 10-K of Preformed Line Products Company for the period ended December 31, 2009 which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange 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 Preformed Line Products Company.

March 15, 2010	/s/ Eric R. Graef
	Eric R. Graef
	Chief Financial Officer and Vice President — Finance      (Principal Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to Preformed Line Products Company and will be retained by Preformed Line Products Company and furnished to the Securities and Exchange Commission or its staff upon request.