Document:

EX-10.3

TERMINATION PROTECTION AGREEMENT

AGREEMENT effective June 1, 2005 between Thomas and Betts Corporation and its successors and
assigns (the “Company”) and Stanley P. Locke (“Executive”).

WHEREAS, Executive has important management responsibilities and talents which benefit the
Company and its affiliates; and

WHEREAS, the Company believes that its best interests are served if Executive is encouraged to
remain with the Company and the Company has determined that Executive’s ability to perform
Executive’s responsibilities and utilize Executive’s talents for the benefit of the Company, and
the Company’s ability to retain Executive as an employee, will be significantly enhanced if
Executive is provided with fair and reasonable protection from the risks associated with a change
in ownership or control of the Company; and

WHEREAS, the Board has approved the terms and provisions of this Agreement at its meeting on
June 1, 2005;

NOW, THEREFORE, the Company and Executive hereby agree as follows:

1. Defined Terms.

Unless otherwise indicated, capitalized terms used in this Agreement which are defined in
Schedule A shall have the meanings set forth in Schedule A.

The Company and the Executive both agree that the definition of “Change of Control” listed in
Schedule A shall be used for Executive in any and all plans, programs or agreements in which the
Executive participates or to which Executive is a party in lieu of any similar definition used in
such plans, programs or agreements.

2. Effective Date; Term.

This Agreement shall commence on June 1, 2005 (the “Effective Date”) and shall continue in
effect through June 1, 2008; provided, however, that the term of this Agreement
shall automatically be extended for one additional year beyond June 1, 2008 and for successive one
year periods thereafter, unless, not later than January 31st of the third calendar year
preceding the year in which the term would otherwise automatically extend (e.g., 2006 for the 2009
calendar year, 2007 for the 2010 calendar year, etc.), the Company shall have given written notice
to Executive that it does not wish to extend this Agreement for an additional year, in which event
this Agreement shall continue to be effective until June 1 of the calendar year immediately
proceeding the calendar year in which the term would have otherwise automatically extended;
provided, further, that, notwithstanding any such notice by the Company not to
extend, if a Change in Control occurs during the original or any extended term of this Agreement,
this Agreement shall remain in effect for a period of three (3) years after such Change in Control.

3. Change in Control Benefits.

If Executive’s employment with the Company or its affiliates is terminated at any time within
three (3) years following a Change in Control (i) by the Company or its affiliates without Cause,
or (ii) by Executive for Good Reason (the effective date of either such termination hereafter
referred to as the “Termination Date”), Executive shall be entitled to the benefits provided
hereafter in this Section 3 and as otherwise set forth in this Agreement. If Executive’s
employment is terminated within one (1) year prior to a Change in Control, and Executive reasonably
demonstrates after such Change in Control that such termination was at the request or suggestion of
any individual or entity who or which ultimately effects a Change in Control (an “Anticipatory
Termination”), then Executive’s Termination Date shall be deemed to have occurred immediately
following the Change in Control, and Executive shall be entitled to the benefits provided hereafter
in this Section 3 and as otherwise set forth in this Agreement. In the event that Executive’s
employment is terminated as a result of death or Disability, Executive shall not be entitled to the
benefits provided in this Section 3 however, the Executive and/or the Executive’s Family shall be
entitled to receive benefits at least equal to the most favorable benefits provided by the Company
under such plans, programs and policies relating to death and/or disability benefits as in effect
at any time during the 90-day period immediately preceding the Termination Date.

(a) Severance Benefits. Within ten (10) business days after the Termination Date, the
Company shall pay Executive the aggregate of the following amounts:

(i) Executive’s earned but unpaid base salary through the Termination Date at the rate in
effect on the Termination Date, or if higher, at the highest rate in effect at any time within the
90-day period preceding the Change in Control;

(ii) any unpaid annual bonus payable to Executive in respect of the calendar year ending prior
to the Termination Date (but not less than the Average Bonus);

(iii) a prorated Average Bonus for the calendar year in which the Termination Date occurs,
calculated by multiplying the Average Bonus by a fraction, the numerator of which is the number of
days elapsed in the calendar year up to and including the Termination Date and the denominator of
which is 365;

(iv) a lump sum amount, in cash, equal to three (3) times Executive’s Annual Compensation;

(v) any unpaid earned and/or accrued vacation;

(b) Additional Health Care Coverage. Until the third anniversary of the Termination
Date, Executive and, as applicable, Executive’s family shall be eligible, at the Company’s expense,
to Participate in each of the Company’s welfare benefit plans, including, without limitation, all
medical, prescription, dental, disability, salary continuance, group life, accidental death and
travel accident insurance plans and programs of the Company, at the highest level provided to
Executive during the period beginning one year prior to the Change in Control and ending on the
Termination Date; provided, however, that if Executive becomes employed by a new
employer, the coverages provided by the Company pursuant to this sentence shall become secondary to
those coverages provided by Executive’s new employer. In addition, Executive will be entitled to
full COBRA continuation coverage commencing on the third anniversary of the Termination Date.

If the Company reasonably determines that the coverage required under this Section 3(b) would cause
a welfare plan sponsored by the Company to violate any provision of the Code prohibiting
discrimination in favor of highly compensated employees or key employees, or if any benefits
described in this Section 3(b) cannot be provided (or the Company determines that it does not wish
to provide such benefits) pursuant to the appropriate plan or program maintained for employees of
the Company, the Company shall provide such benefits outside such plan or program at no additional
costs (including, without limitation, tax costs) to the Executive or, as determined by the Company
it its sole discretion, the Company will pay to the Executive the cash equivalent thereof.

(c) Full Vesting of All Stock Options and Restricted Shares.*
Notwithstanding any provision to the contrary in the Company’s equity incentive plans (the “Equity
Plans”) or any award agreement under the Equity Plans, (i) any outstanding, unexercisable stock
options or unvested restricted shares shall become fully exercisable and vested as of the
Termination Date and (ii) all stock options, whether or not such stock options first become
exercisable pursuant to this Agreement, shall remain exercisable until the third anniversary of the
Termination Date; provided, however, that this sentence shall not restrict the
Company’s ability to adjust or settle outstanding stock options pursuant to the terms of the Equity
Plans, so long as Executive is treated in any such adjustment or settlement no less favorably than
any other employee of the Company.

(d) Retirement Benefits. Executive shall be entitled to receive retirement benefits
under the change in control provisions of the Company’s Executive Retirement Plan.

(e) Deferred Compensation. Except as provided otherwise under the Company’s
Supplemental Executive Investment Plan, within ten (10) business days after the Termination Date,
the Company shall pay Executive any undistributed amounts relating to compensation which were
previously deferred by Executive.

(f) Outplacement Services. The Company shall provide Executive with standard
outplacement services by any one qualified outplacement agency selected by Executive and reasonably
satisfactory to the Company.

(g) Other Payments And Benefits. Executive shall be entitled to receive any payments
or benefits that Executive is entitled to pursuant to the terms of any Company plans, programs or
arrangements (including, but not limited to, retention arrangements), and any such payments or
benefits shall vest, (except as provided in the Thomas & Betts Pension Plan and the Thomas & Betts
Corporation Employee’s Investment Plan) and, if applicable, become payable immediately upon the
Termination Date.

4. Mitigation.

Executive shall not be required to mitigate damages or the amount of any payment provided for
under this Agreement by seeking other employment or otherwise, and compensation earned from such
employment or otherwise shall not reduce the amounts otherwise payable under this Agreement. No
amounts payable under this Agreement shall be subject to reduction or offset in respect of any
claims which the Company (or any other person or entity) may have against Executive.

5. Gross-Up.

(a) In the event that any payment or benefit received or to be received by Executive pursuant
to the terms of this Agreement (the “Contract Payments”) or otherwise in connection with
Executive’s termination of employment or contingent upon a change in ownership or control pursuant
to any plan or arrangement or other agreement with the Company (or any affiliate) (“Other Payments”
and, together with the Contract Payments, the “Payments”) would be subject to the excise tax (the
“Excise Tax”) imposed by Section 4999 of the Code, as determined as provided below, the Company
shall pay to Executive, at the time specified in Section 5(b) below, an additional amount (the
“Gross-Up Payment”) such that the net amount retained by Executive, after deduction of the Excise
Tax on the Payments and any federal, state and local income or other tax and excise tax upon the
payment provided for by this Section 5(a), and any interest, penalties or additions to tax payable
by Executive with respect thereto, shall be equal to the total value of the Payments at the time
such Payments are to be made. For purposes of determining whether any of the Payments will be
subject to the Excise Tax and the amounts of such Excise Tax, (1) the total amount of the Payments
shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and
all “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code shall be
treated as subject to the Excise Tax, except to the extent that, in the opinion of independent tax
counsel selected by the Company’s independent auditors and reasonably acceptable to Executive (“Tax
Counsel”), a Payment (in whole or in part) does not constitute a “parachute payment” within the
meaning of Section 280G(b)(2) of the Code, or such “excess parachute payments” (in whole or in
part) are not subject to the Excise Tax, (2) the amount of the Payments that shall be treated as
subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Payments or
(B) the amount of “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code
(after applying clause (1) hereof), and (3) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by Tax Counsel in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to pay federal income tax at the highest marginal rates of federal income
taxation applicable to individuals in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest effective rates of taxation applicable to
individuals as are in effect in the state and locality of Executive’s residence or place of
employment in the calendar year in which the Gross-Up Payment is to be made, net of the maximum
reduction in federal income taxes that can be obtained from deduction of such state and local
taxes, taking into account any limitations applicable to individuals subject to federal income tax
at the highest marginal rates.

(b) The Gross-Up Payments provided for in Section 5(a) hereof shall be made upon the earlier
of (i) the payment to Executive of any Payment or (ii) the imposition upon Executive or payment by
Executive of any Excise Tax.

(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of a Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 10 business days after
Executive is informed in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30 day period following the date on which Executive gives such
notice to the Company (or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim, Executive shall:

(i) give the Company any information reasonably requested by the Company relating to
such claim;

(ii) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the
Company and reasonably satisfactory to Executive;

(iii) cooperate with the Company in good faith in order to effectively contest such
claim; and

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including, but not limited to, additional interest and penalties and related legal,
consulting or other similar fees) incurred in connection with such contest and shall indemnify and
hold Executive harmless, on an after-tax basis, for any Excise Tax or other tax (including interest
and penalties with respect thereto) imposed as a result of such representation and payment of costs
and expenses.

(d) The Company shall control all proceedings taken in connection with such contest and, at
its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its sole option, either
direct Executive to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if the Company directs
Executive to pay such claim and sue for a refund, the Company shall advance the amount of such
payment to Executive on an interest-free basis, and shall indemnify and hold Executive harmless, on
an after-tax basis, from any Excise Tax or other tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed income with respect to
such advance; and provided, further, that if Executive is required to extend the
statute of limitations to enable the Company to contest such claim, Executive may limit this
extension solely to such contested amount. The Company’s control of the contest shall be limited
to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall
be entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority. In addition, no position may be taken nor any final
resolution be agreed to by the Company without Executive’s consent if such position or resolution
could reasonably be expected to adversely affect Executive (including any other tax position of
Executive unrelated to the matters covered hereby).

(e) As a result of any uncertainty in the application of Section 4999 of the Code at the time
of the initial determination by the Company or the Tax Counsel hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been made
(“Underpayment”), consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies and Executive thereafter is required to pay to the Internal
Revenue Service an additional amount in respect of any Excise Tax, the Company or the Tax Counsel
shall determine the amount of the Underpayment that has occurred and any such Underpayment shall
promptly be paid by the Company to or for the benefit of Executive.

(f) If, after the receipt by Executive of the Gross-Up Payment or an amount advanced by the
Company in connection with the contest of an Excise Tax claim, Executive receives any refund with
respect to such claim, Executive shall promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable thereto). If after the
receipt by Executive of an amount advanced by the Company in connection with an Excise Tax claim, a
determination is made that Executive shall not be entitled to any refund with respect to such claim
and the Company does not notify Executive in writing of its intent to contest the denial of such
refund prior to the expiration of 30 days after such determination, such advance shall be forgiven
and shall not be required to be repaid.

	 	6.	 	Employment Status; No Effect Prior to Change in Control;
Termination for Cause.

(a) Executive and the Company acknowledge and agree that prior to a Change in Control,
Executive’s employment is “at will” and may be terminated at any time, by the Company with or
without Cause or by Executive with or without Good Reason, subject to applicable law. In the event
Executive’s employment is terminated for any reason prior to a Change in Control, other than in the
case of an Anticipatory Termination, Executive shall have no rights to any payments or benefits
under this Agreement and after any such termination, this Agreement shall be of no further force or
effect.

(b) In the event Executive is terminated for Cause following a Change in Control, Executive
shall have no rights to any payments or benefits under this Agreement.

	 	7.	 	Indemnification; Director’s and Officer’s Liability
Insurance.

Until the sixth anniversary of the Termination Date and for so long thereafter as any claim
for indemnification asserted on or prior to such date has not been fully adjudicated (the
“Indemnification Period”), the Company shall indemnify, defend, and hold harmless Executive against
all losses, claims, damages, costs, expenses (including attorneys’ fees) or liabilities (including
attorneys’ fees) arising out of actions or omissions or alleged actions or omissions which have
occurred on or prior to the Termination Date to the same extent and on the same terms and
conditions (including with respect to advancement of expenses) as permitted under applicable law
and the Company’s certificate of incorporation and by-laws as in effect immediately prior to the
Change in Control. In addition, the Company shall maintain Director’s and Officer’s liability
insurance (from an insurance company rated not less than A by A.M. Best Company) and, if Executive
served or has served as a fiduciary of any pension or benefit plan, ERISA fiduciary insurance, on
behalf of Executive, at the level in effect immediately prior to the Change in Control, for the
Indemnification Period.

8. Confidential Information.

Executive acknowledges that any confidentiality agreement entered into by Executive and the
Company remains in full force and effect and survives the termination of his or her employment with
the Company; provided that nothing contained in such agreement or this Section 8 shall
prevent Executive from being employed by a competitor of any of the Company or utilizing
Executive’s general skills, experience, and knowledge, including those developed while employed by
any of the Company or its affiliates.

9. Disputes.

Any dispute or controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Memphis, Tennessee or, at the option of Executive, in the county
where Executive then resides, in accordance with the Rules of the American Arbitration Association
then in effect, except that Executive may, at Executive’s option, bring that action in a court of
competent jurisdiction, even if the Company has earlier instituted an action hereunder. Judgment
may be entered on an arbitrator’s award relating to this Agreement in any court having
jurisdiction.

10. Costs of Proceedings.

The Company shall pay for all costs and expenses of Executive, at least monthly, including
attorneys’ fees and disbursements, in connection with any legal proceeding (including arbitration),
whether instituted by the Company or by Executive, relating to the interpretation or enforcement of
any provision of this Agreement, except that if Executive instituted the proceeding and the judge,
arbitrator or other individual presiding over the proceeding affirmatively finds that Executive
instituted the proceeding in bad faith, then Executive shall be required to pay all costs and
expenses of Executive, including attorney’s fees and disbursements, and shall not be entitled to
reimbursement. The Company shall pay prejudgment interest on any money judgment obtained by
Executive as a result of such a proceeding, calculated at the prime rate of interest as reported in
the Wall Street Journal, as in effect from time to time, from the date that payment should have
been made to Executive under this Agreement.

11. Successors And Assigns.

Except as otherwise provided herein, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the Company and Executive and their respective heirs, legal
representatives, successors and assigns. If the Company shall be merged into or consolidated with
another entity, the provisions of this Agreement shall be binding upon and inure to the benefit of
the entity surviving such merger or resulting from such consolidation. The Company shall require
any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business or assets of the Company, by agreement in form and substance
satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. The provisions of this Section 11 shall continue to apply to each
subsequent employer of Executive in the event of any subsequent merger, consolidation or transfer
of assets of such subsequent employer.

12. Withholding.

Notwithstanding the provisions of Sections 4 and 5 hereof, the Company may, to the extent
required by law, withhold applicable federal, state and local income and other taxes from any
payments due to Executive hereunder.

13. Applicable Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of
Tennessee, without reference to principles of conflicts of law, applicable to contracts made and to
be performed therein.

14. Entire Agreement.

This Agreement constitutes the entire agreement between the parties regarding severance
benefits following a Change in Control and supersedes and overrides any prior agreement entered
into between the Company and Executive regarding severance benefits following a Change in Control.
This Agreement may be changed only by a written agreement executed by the Company and Executive.

15. Notice.

Notices and all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered, delivered by a nationally
recognized overnight delivery service, or sent by certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses last given by each party to the other, provided that
all notices to the Company shall be directed to the attention of the Board with a copy to the
Secretary of the Company. All notices and communications shall be deemed to have been received on
the date of delivery thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.

16. Severability.

The provisions of this Agreement shall be deemed severable, and the invalidity or
unenforceability of any provision hereof shall not affect the validity or enforceability of the
other provisions hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement on the 1st day of June, 2005.

	 	 	 
	THOMAS & BETTS CORPORATION

	 
	 	 
	By:

	 	/s/ J.N. Raines
	 

	 	 
	Name

	 	J.N. Raines

	 	 	 	Title
Vice President — General Counsel and
Secretary

/s/ Stanley P. Locke

	 	 	 	Stanley P. Locke

Vice President — Controller

1

Schedule A

CERTAIN DEFINITIONS

As used in this Agreement, and unless the context requires a different meaning, the following
terms, when capitalized, have the meaning indicated:

"Annual Compensation” means the sum of (i) Executive’s annual rate of base salary in
effect on the date of the Change in Control or, if higher, the Termination Date, (ii) the Average
Bonus and (iii) Executive’s perquisite allowance for the calendar year immediately prior to the
calendar year in which the Change in Control occurs.

"Average Bonus” means the greater of (i) Executive’s target bonus for the calendar
year immediately prior to the calendar year in which the Change in Control occurs or (ii) the
highest bonus paid or payable to Executive in respect of any of the five (5) calendar years
(annualized with respect to any such calendar year for which Executive has been employed for only a
portion thereof) immediately prior to the calendar year in which the Change in Control occurs.

"Average Long Term Incentive Award” means the sum of (i) the average Black-Scholes
value (as determined by the accountant employed by the Company immediately prior to the Change in
Control) of the annual stock options granted to Executive during the three calendar years
immediately prior to the calendar year in which the Change in Control occurs and (ii) the average
value of the of the annual restricted stock awards (determined by reference to the closing values
of the restricted shares on the dates on which they were granted) granted to Executive during the
three calendar years immediately prior to the calendar year in which the Change in Control occurs.

"Board” means the Company’s Board of Directors.

"Cause” shall mean Executive’s termination of employment due to:

	 	(a)	 	Executive’s conviction of, or plea of guilty or nolo
contendere to, a felony; or

(b) the willful engaging by Executive in gross misconduct which is materially and
demonstrably injurious to the Company.

For a termination of employment to be for Cause: (i) Executive must receive a written notice
which indicates in reasonable detail the facts and circumstances claimed to provide a basis for the
termination of Executive’s employment for Cause; (ii) Executive must be provided with an
opportunity to be heard no earlier than 30 days following the receipt of such notice (during which
notice period Executive has the opportunity to cure and has failed to cure or resolve the behavior
in question); and (iii) there must be a good faith determination of Cause by at least
three-quarters of the non-employee outside director members of the Board.

"Change in Control” For the purpose of this Agreement, a “Change in Control” shall,
without limitation, be deemed to have occurred if:

(a) A third person, including a “group” as such term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes the beneficial owner,
directly or indirectly, of 25% or more of the combined voting power of the Company’s outstanding
voting securities ordinarily having the right to vote for the election of directors of the Company;
or

(b) Individuals who, as of the date hereof, constitute the Board cease for any reason to
constitute at least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least three-quarters of the directors comprising the
Board as of the date hereof (other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election contest relating to the
election of directors of the Company) shall be, for purposes of this Agreement, considered as
though such person were a member of the Board as of the date hereof; or

(c) The consummation of (i) any consolidation, share exchange, merger or amalgamation of the
Company as a result of which the individuals and entities who were the respective beneficial owners
of the outstanding common stock of the Company and the voting securities of the Company immediately
prior to such consolidation, share exchange, merger or amalgamation do not beneficially own,
immediately after such consolidation, share exchange, merger or amalgamation, directly or
indirectly, 60% or more, respectively, of the common stock and combined voting power of the voting
securities entitled to vote of the company resulting from such consolidation, share exchange,
merger or amalgamation; or (ii) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all the assets or earning power of the
Company; or

(d) The approval by the shareholders of a plan of complete liquidation or dissolution of the
Company.

(e) For purposes of any plan or agreement that refers to a definition of Change in
Control in Section 2 of the Employment Agreement, the above definition of Change in Control shall
be deemed to be the reference definition.

"Code” means the Internal Revenue Code of 1986, as amended.

"Company” means Thomas & Betts Corporation and its successors and assigns.

"Disability” means total disability or permanent disability as determined under the
Company’s long-term disability plan in which Executive participates, as it exists from time to
time; provided, however, if Executive does not participate in the Company’s
long-term disability plan, then “Disability” means an illness or injury which prevents Executive
from performing his or her duties, as they existed immediately prior to the illness or injury, on a
full time basis for 180 consecutive business days, and is determined to be total and permanent
disability by a physician selected by the Company and acceptable to Executive or Executive’s legal
representative.

"Good Reason” means any of the following actions, without Executive’s express prior
written approval, other than due to Executive’s permanent disability or death:

(i) any reduction in Executive’s annual base salary;

(ii) any failure to pay Executive an annual bonus, in cash, at least equal to the Average
Bonus;

(iii) any failure by the Company to grant Executive with long term incentives annually that
are at least equal to the value of the Average Long Term Incentive Award, where the value of the
long term incentives granted to Executive in any year are determined by the accountants employed by
the Company immediately prior to the Change in Control using a valuation method consistent with the
methodology used to value the Average Long Term Incentive Award;

(iv) Executive’s duties, titles, responsibilities or authority (including offices and
reporting relationships) are diminished in any way in comparison to the duties, titles and
responsibilities or authority enjoyed by Executive immediately prior to the Change in Control,
other than as a result of an insubstantial and inadvertent action which is remedied by the Company
promptly after receipt of notice thereof by Executive;

(v) any material reduction in Executive’s and/or Executive’s family’s eligibility to
participate and his/her/their level of benefit in each of the Company’s welfare benefit plans,
including, without limitation, all medical, prescription, dental, disability, salary continuance,
group life, accidental death and travel accident insurance plans and programs of the Company in
comparison to the highest level of eligibility and level of benefit enjoyed by Executive and
Executive’s family during the 90 day period preceding the Change in Control;

(vi) any material reduction, in the aggregate, in Executive’s ability to participate in all
incentive, savings and retirement plans or programs applicable to other key executives (including
the Company’s restricted stock and stock option plans), to a level less favorable to Executive than
the highest level enjoyed by Executive in such plans or programs during the 90 day period preceding
the Change in Control;

(vii) the Company’s requiring Executive to be based at any office or location which is
located more than 35 miles from the location where Executive was based immediately prior to the
Change in Control;

(viii) any material reduction of any fringe benefits, including any car allowance enjoyed by
Executive during the ninety (90) day period immediately prior to the Change in Control;

(ix) any material reduction in the level of Executive’s entitlement to a particular office or
office size or to particular furnishings or to secretarial or other assistance as enjoyed by
Executive during the ninety (90) day period immediately prior to the Change in Control;

(x) any reduction in the level of Executive’s entitlement to paid vacation as enjoyed by
Executive during the ninety (90) day period immediately prior to the Change in Control;

(xi) any termination of employment by Executive within the thirty-day period immediately
following the first anniversary of the Change in Control; or

(xii) the failure of the Company to obtain a satisfactory agreement from any successor to
assume and agree to perform the Agreement, as contemplated in Section 11 of this Agreement.

Executive’s continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstances constituting Good Reason hereunder. For purposes of the Agreement,
any good faith determination of “Good Reason” made by Executive shall be conclusive.

* Because this provision extends the option
term, it could be viewed as a cancellation and re-grant of an ISO and if such
ISO is “in the money” it may cause such regranted option to fail to qualify as
an ISO. Also, even if the option qualifies as an ISO, it will lose its ISO
treatment if it remains outstanding after three months from the termination
date.

2Exhibit 4.2

SUBSEQUENT TRANSFER INSTRUMENT

Pursuant to this Subsequent Transfer Instrument, dated May 25, 2005 (the “Instrument”), between Option One Mortgage Acceptance Corporation as seller (the “Depositor”) and Wells Fargo Bank, N.A. as trustee of the Option One Mortgage Loan Trust 2005-2 Asset-Backed Certificates, Series 2005-2, as purchaser (the “Trustee”), and pursuant to the Pooling and Servicing Agreement, dated as of May 1, 2005 (the “Pooling and Servicing Agreement”), among the Depositor as depositor, Option One Mortgage Corporation as master servicer (the “Master Servicer”) and the Trustee as trustee, the Depositor and the Trustee agree to the sale by the Depositor and the purchase by the Trustee in trust, on behalf of the Trust, of the Mortgage Loans listed on the attached Schedule of Subsequent Mortgage Loans (the “Subsequent Mortgage Loans”).

Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Pooling and Servicing Agreement.

	
            Section 1.
 	
            CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.
 

(a)        The Depositor does hereby sell, transfer, assign, set over and convey to the Trustee in trust, on behalf of the Trust, without recourse, all of its right, title and interest in and to the Subsequent Mortgage Loans, and including all amounts due on the Subsequent Mortgage Loans after the Cut-off Date, and all items with respect to the Subsequent Mortgage Loans to be delivered pursuant to Section 2.01 of the Pooling and Servicing Agreement; provided, however that the Depositor reserves and retains all right, title and interest in and to amounts due on the Subsequent Mortgage Loans on or prior to the Cut-off Date. The Depositor, contemporaneously with the delivery of this Agreement, has delivered or caused to be delivered to the Trustee each item set forth in Section 2.01 of the Pooling and Servicing Agreement. The transfer to the Trustee
by the Depositor of the Subsequent Mortgage Loans identified on the Schedule of Subsequent Mortgage Loans shall be absolute and is intended by the Depositor, the Master Servicer, the Trustee and the Certificateholders to constitute and to be treated as a sale by the Depositor to the Trust Fund.

(b)        The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee without recourse for the benefit of the Certificateholders all the right, title and interest of the Depositor, in, to and under the Subsequent Mortgage Loan Purchase Agreements, dated the date hereof, to the extent of the Subsequent Mortgage Loans.

	
            (c)
 	
            Additional terms of the sale are set forth on Attachment A hereto.
 

	
            Section 2.
 	
      REPRESENTATIONS AND WARRANTIES; CONDITIONS PRECEDENT.
 

(a)        The Depositor hereby confirms that each of the conditions precedent and the representations and warranties set forth in Section 2.08 of the Pooling and Servicing Agreement are satisfied as of the date hereof.

(b)        All terms and conditions of the Pooling and Servicing Agreement are hereby ratified and confirmed; provided, however, that in the event of any conflict, the provisions of this Instrument shall control over the conflicting provisions of the Pooling and Servicing Agreement.

	
            Section 3.
 	
            RECORDATION OF INSTRUMENT.
 

 

 

 

To the extent permitted by applicable law, this Instrument, or a memorandum thereof if permitted under applicable law, is subject to recordation in all appropriate public offices for real property records in all of the counties or other comparable jurisdictions in which any or all of the properties subject to the Mortgages are situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Master Servicer at the Certificateholders’ expense on direction of the related Certificateholders, but only when accompanied by an Opinion of Counsel to the effect that such recordation materially and beneficially affects the interests of the Certificateholders or is necessary for the administration or servicing of the Mortgage Loans.

	
            Section 4.
 	
            GOVERNING LAW.
 

This Instrument shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws, without giving effect to principles of conflicts of law.

	
            Section 5.
 	
            COUNTERPARTS.
 

This Instrument may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same instrument.

	
            Section 6.
 	
            SUCCESSORS AND ASSIGNS .
 

This Instrument shall inure to the benefit of and be binding upon the Depositor and the Trustee and their respective successors and assigns.

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:         
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:                   
 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A., as Trustee for Option

            One Mortgage Loan Trust 2005-2, Asset-Backed

            Certificates Series 2005-2 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:         
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:                   
 

 

Attachments

	
            A.
 	
            Additional terms of sale.
 	
             

	
            B.
 	
            Schedule of Subsequent Mortgage Loans.
 
	
            C.
 	
            Schedule of Prepayment Charges.
 	
             

				

 

 

ATTACHMENT A

ADDITIONAL TERMS OF SALE

	
            1.
 	
            General
 	
             

	
             
	
            1.
 	
            Subsequent Cut-off Date: May 1, 2005
 	
             

	
             
	
            2.
 	
            Subsequent Transfer Date: May 25, 2005
 
					

	
            3.
 	
            Aggregate Principal Balance of the Subsequent Mortgage Loans as of the Subsequent Cut-off Date: $209,996,027.91
 

	
            4.
 	
            Purchase Price: 100%
 

2.          The obligation of the Trust Fund to purchase a Subsequent Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of the conditions set forth in the immediately following paragraph and the accuracy of the following representations and warranties with respect to each such Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off Date:  (i) such Subsequent Mortgage Loan may not be 30 or more days delinquent as of the last day of the month preceding the Subsequent Cut-off Date; (ii) the original term to stated maturity of such Subsequent Mortgage Loan will not be less than 120 months and will not exceed 360 months; (iii) the Subsequent Mortgage Loan may not provide for negative amortization; (iv) such Subsequent Mortgage Loan will not have a Loan-to-Value Ratio greater than 100.00%; (v) such
Subsequent Mortgage Loans will have, as of the Subsequent Cut-off Date, a weighted average term since origination not in excess of 360 months; (vi) such Subsequent Mortgage Loan, if a Fixed Rate Mortgage Loan, shall have a Mortgage Rate that is not less than 5.250% per annum or greater than 13.500% per annum; (vii) such Subsequent Mortgage Loan shall have been serviced by the Master Servicer since origination, the date of purchase or the date of acquisition of the servicing (viii) each of the Subsequent Mortgage Loans will have a first payment date occurring on or before June 1, 2005 and will include 30 days’ interest thereon; (ix) if the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent Mortgage Loan will have a Gross Margin not less than 2.250% per annum; (x) if the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent Mortgage Loan will have a Maximum Mortgage Rate not less than 10.000% per annum; (xi) if the Subsequent
Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent Mortgage Loan will have a Minimum Mortgage Rate not less than 4.000% per annum, and (xii) such Subsequent Mortgage Loan shall have been underwritten in accordance with the criteria set forth under “Option One Mortgage Corporation—Underwriting Standards” in the Prospectus Supplement.

3.          Following the purchase of any Subsequent Group I Mortgage Loan by the Trust, the Group I Mortgage Loans (including such Subsequent Group I Mortgage Loans) will: (i) have a weighted average original term to stated maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate of not less than 7.000% per annum and not more than 7.750% per annum; (iii) have a weighted average Loan-to-Value Ratio of not more than 81.00%; (iv) have no Mortgage Loan with an original principal balance which does not conform to Fannie Mae and Freddie Mac principal balance guidelines; (v) will consist of Mortgage Loans with Prepayment Charges representing no less than approximately 70.00% by aggregate Stated Principal Balance of the Group I Mortgage Loans; (vi) will have second lien Mortgage Loans comprising no more than 2.500% of the
Group I Mortgage Loans, (vii) have no more than 20.00% of Fixed Rate Mortgage Loans by aggregate Stated Principal Balance of the Group I Mortgage Loans, (viii) will have a weighted average FICO score of not less than 590 and (ix) will consist of Mortgage Loans covered by the PMI Policy representing no less than 65.00% by aggregate Stated Principal Balance of the Group I Mortgage Loans.  In addition, the Adjustable Rate Group I Mortgage Loans will have a weighted average Gross Margin not less than 4.750% per annum.  For purposes of the calculations described in this paragraph, percentages of the Group I Mortgage Loans will be based on the Stated Principal Balance of the Initial Group I Mortgage Loans as of the Cut-off Date and the Stated Principal Balance of the Subsequent Group I Mortgage Loans as of the related Subsequent Cut-off Date.

 

 

4.          Following the purchase of any Subsequent Group II Mortgage Loan by the Trust, the Group II Mortgage Loans (including such Subsequent Group II Mortgage Loans) will: (i) have a weighted average original term to stated maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate of not less than 7.000% per annum and not more than 7.750% per annum; (iii) have a weighted average Loan-to-Value Ratio of not more than 81.00%; (iv) have no Mortgage Loan with a principal balance in excess of $1,500,000; (v) will consist of Mortgage Loans with Prepayment Charges representing no less than 66.00% by aggregate Stated Principal Balance of the Group II Mortgage Loans; (vi) will have second lien Mortgage Loans comprising no more than 2.500% of the Group II Mortgage Loans, (vii) have no more than 20.00% of Fixed Rate
Mortgage Loans by aggregate Stated Principal Balance of the Group II Mortgage Loans, (viii) will have a weighted average FICO score of not less than 600 and (ix) will consist of Mortgage Loans covered by the PMI Policy representing no less than 50.00% by aggregate Stated Principal Balance of the Group II Mortgage Loans.  In addition, the Adjustable Rate Group II Mortgage Loans will have a weighted average Gross Margin not less than 4.750% per annum.  For purposes of the calculations described in this paragraph, percentages of the Group II Mortgage Loans will be based on the Stated Principal Balance of the Initial Group II Mortgage Loans as of the Cut-off Date and the Stated Principal Balance of the Subsequent Group II Mortgage Loans as of the related Subsequent Cut-off Date.

Notwithstanding the foregoing, any Subsequent Mortgage Loan may be rejected by (i) the NIMS Insurer or (ii) any Rating Agency if the inclusion of any such Subsequent Mortgage Loan would adversely affect the ratings of any Class of Certificates.  At least one Business Day prior to the Subsequent Transfer Date, each Rating Agency shall notify the Trustee as to which Subsequent Mortgage Loans, if any, shall not be included in the transfer on the Subsequent Transfer Date; provided, however, that the Master Servicer, in its capacity as Originator, shall have delivered to each Rating Agency at least three Business Days prior to such Subsequent Transfer Date a computer file acceptable to each Rating Agency describing the characteristics specified in paragraphs (c) and (d) above.

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