Document:

EX-10.1

 Exhibit 10.1 

Execution Version 

AMENDMENT NO. 2 
 This
Amendment No. 2, dated as of March 21, 2018 (this “Amendment”), to that certain Amended and Restated Credit Agreement, dated as of September 23, 2016 (as amended by Amendment No 1, dated as of March 24, 2017 and
Incremental Facility Joinder Agreement, dated as of September 26, 2017, the “ Credit Agreement”), among ALLISON TRANSMISSION HOLDINGS, INC., a Delaware corporation (“Holdings”), ALLISON TRANSMISSION, INC., a
Delaware corporation (the “Borrower”), the several banks and other financial institutions or entities from time to time parties thereto (the “Lenders”), CITICORP NORTH AMERICA, INC., as Administrative Agent, and the
other agents and arrangers parties thereto, is entered into by and among Holdings, the Borrower, the Agents and the New Term Lender (as defined below). Capitalized terms used herein but not defined herein are used as defined in the Credit Agreement.

 W I T N E S S E T
H: 
 WHEREAS, the Borrower has hereby notified the Administrative Agent and each Term Lender that it intends to incur
Specified Refinancing Debt pursuant to Section 2.26(a) of the Credit Agreement in order to refinance the Term Loans outstanding under the Credit Agreement immediately prior to the Second Amendment Effective Date (as defined below) (the
“Existing Term Loans”); 
 WHEREAS, pursuant to Section 2.26(a) of the Credit Agreement, the Borrower may incur
Specified Refinancing Debt by, among other things, entering into this Amendment pursuant to the terms and conditions of the Credit Agreement with Term Lenders agreeing to provide such Specified Refinancing Debt; 

WHEREAS, the Borrower has requested that (i) the new term Lender party hereto (the, “New Term Lender”), (ii) the Lenders
holding Existing Term Loans that have executed and delivered a consent to this Amendment substantially in the form of Exhibit A hereto (a “Lender Consent”) indicating the Cashless Settlement Option (each, a “Cashless
Term Lender”), and (iii) the Lenders holding Existing Term Loans that have executed and delivered a Lender Consent indicating the “Assignment Settlement Option” (each, an “Assignment Term Lender”) extend
credit to the Borrower in the form of Term Loans in an aggregate principal amount of $1,175,681,317.87 (the “New Term Loans”), the proceeds of which shall repay all or a portion of the Existing Term Loans; 

WHEREAS, the New Term Lender has indicated its willingness to lend such New Term Loans in the aggregate amount specified on its signature page
to this Amendment on the terms and subject to the conditions herein; 
 WHEREAS, each Cashless Term Lender has agreed to make New Term Loans
on the Second Amendment Effective Date, in an aggregate amount equal to such Cashless Term Lender’s Existing Term Loans (or such lesser amount as may be allocated to such Cashless Term Lender by the Administrative Agent), the proceeds of which
shall be used to repay such Lender’s Existing Term Loans, and has authorized the Administrative Agent to execute this Amendment on its behalf; 

WHEREAS, each Assignment Term Lender has indicated its willingness to accept an Assignment and Assumption of New Term Loans from Citibank,
N.A., as a New Term Lender, in an aggregate amount equal to such Assignment Term Lender’s Existing Term Loans (or such lesser amount as may be allocated to such Assignment Term Lender by the Administrative Agent), and has authorized the
Administrative Agent to execute this Amendment on its behalf; 
  

 WHEREAS, the New Term Lender, each Cashless Term Lender and each Assignment Term Lender
(constituting the lenders required pursuant to Section 10.1 of the Credit Agreement) have agreed, subject to the terms and conditions set forth herein to amend the Credit Agreement as set forth in Section 2 below and
have authorized the Administrative Agent to execute this Amendment on its behalf. 
 NOW, THEREFORE, in consideration of the premises and
agreements, provisions and covenants herein contained, the parties hereto agree as follows: 
 SECTION 1. NEW TERM LOANS 

1.1 New Term Loans. Effective as of the Second Amendment Effective Date and on the terms and subject to the conditions herein,
each Cashless Term Lender hereby agrees to make New Term Loans up to the aggregate principal amount of such Lender’s Existing Term Loans (or such lesser amount as may be allocated to such Cashless Term Lender by the Administrative Agent) on the
Second Amendment Effective Date and approves the amendments to the Credit Agreement as set forth in this Amendment. On the terms and subject to the conditions herein, the New Term Lender hereby agrees to make New Term Loans in the aggregate amount
specified on such New Term Lender’s signature page to this Amendment on the Second Amendment Effective Date and approves the amendments to the Credit Agreement as set forth in this Amendment. On the terms and subject to the conditions herein,
each Assignment Term Lender agrees to accept an Assignment and Assumption of New Term Loans from the New Term Lender, in an aggregate amount equal to such Assignment Term Lender’s Existing Term Loans (or such lesser amount as may be allocated
to such Assignment Term Lender by the Administrative Agent) on the Second Amendment Effective Date and approves the amendments to the Credit Agreement as set forth in this Amendment. Pursuant to Section 2.26 of the Credit Agreement, the New
Term Loans shall have the terms set forth in this Amendment and in the Credit Agreement (as amended by this Amendment). 
 1.2 Use of
Proceeds. The proceeds of the New Term Loans shall be applied toward the payment of (a) the aggregate outstanding principal amount of the Existing Term Loans and (b) fees and expenses payable in connection with the New Term Loans.

 1.3 Interest Period. The Borrower shall make an Interest Period election with respect to the Term Loans (including the New
Term Loans) at least two Business Days prior to the Second Amendment Effective Date in accordance with Section 2.13(b) of the Credit Agreement. 

1.4 Credit Agreement Governs. Effective as of the Second Amendment Effective Date, except as set forth in this Amendment, the New
Term Loans shall be “Term Loans” under the Credit Agreement (as amended by this Amendment) and shall be subject to the provisions, including any provisions restricting the rights, or regarding the obligations, of the Loan Parties or any
provisions regarding the rights of the Term Lenders, of the Credit Agreement (as amended by this Amendment) and the other Loan Documents. 
 SECTION 2.
AMENDMENTS TO THE CREDIT AGREEMENT 
 Effective as of the Second Amendment Effective Date (as defined in Section 3 below) and
subject to the satisfaction (or waiver) of the conditions set forth in Section 3 below, the Credit Agreement is hereby amended as follows: 

2.1 The definition of “Applicable Margin” is amended and restated in its entirety as follows: 

  
 2 

 ““Applicable Margin ” or “Applicable Commitment Fee Rate”:
for any day, with respect to (a) the Term Loans, the applicable rate per annum shall be 0.75% with respect to Base Rate Loans and 1.75% with respect to LIBO Rate Loans, (b) the Revolving Loans (including any Swingline Loans), the
applicable rate per annum determined pursuant to the Pricing Grid and (c) the commitment fee payable hereunder, the applicable rate per annum determined pursuant to the Pricing Grid.” 

2.2 The definitions of “Conditional Offer”, “Senior Unsecured Notes” and “Senior Unsecured Notes Indenture” are
deleted in their entirety. 
 2.3 The following definitions shall hereby be inserted into Section 1.1 of the Credit Agreement in the
correct alphabetical order: 
 ““2024 Senior Unsecured Notes”: the Borrower’s 5.000% Senior Unsecured Notes due
2024 pursuant to the 2024 Senior Unsecured Notes Indenture.” 
 ““2024 Senior Unsecured Notes Indenture”: that
certain Indenture, dated as of the Effective Date, among, inter alios, the Borrower and Wilmington Trust, National Association, as trustee, as the same may be amended, supplemented, waived or otherwise modified from time to time to the extent
applicable to the extent not prohibited by this Agreement.” 
 ““2027 Senior Unsecured Notes”: the
Borrower’s 4.750% Senior Unsecured Notes due 2027 pursuant to the 2027 Senior Unsecured Notes Indenture.” 
 ““2027
Senior Unsecured Notes Indenture”: that certain Indenture, dated as of September 26, 2017, among, inter alios, the Borrower and Wilmington Trust, National Association, as trustee, as the same may be amended, supplemented, waived or
otherwise modified from time to time to the extent applicable to the extent not prohibited by this Agreement.” 
 ““Second
Amendment”: Amendment No. 2, dated as of March 21, 2018, among Holdings, the Borrower, the Administrative Agent, the Collateral Agent and the Lenders party thereto.” 

““Second Amendment Effective Date”: as defined in the Second Amendment.” 

2.4 Section 2.12(d) of the Credit Agreement is hereby amended by replacing “Senior Unsecured Notes” with “the 2024 Senior
Unsecured Notes”. 
 2.5 Section 2.28 of the Credit Agreement is hereby amended and restated in its entirety as follows: 

“Term Loan Repricing Transaction. Notwithstanding anything to the contrary in this Agreement, in the event that, on or prior to the
six month anniversary of the Second Amendment Effective Date, the Borrower (a) makes any prepayment of Term Loans constituting a Term Loan Repricing Transaction or (b) effects any amendment of this Agreement constituting a Term Loan
Repricing Transaction, the Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Term Lenders, (x) in the case of clause (a), a prepayment premium of 1.00% of the amount of the Term Loans being
prepaid and (y) in the case of clause (b), a payment equal to 1.00% of the aggregate amount of the applicable Term Loans outstanding immediately prior to such amendment.” 

  
 3 

 2.6 Paragraph (ii) of Section 7.2(j) of the Credit Agreement is hereby amended and
restated in its entirety as follows: 
 “(j) (ii) Guarantee Obligations of any Subsidiary Guarantor in respect of such
Indebtedness, interest, fees, discounts, premiums and expenses; provided, in each case, that in the case of any guarantee of Indebtedness in respect of the 2024 Senior Unsecured Notes and the 2027 Senior Unsecured Notes by any Restricted Subsidiary
that is not a Subsidiary Guarantor, such Restricted Subsidiary becomes a Subsidiary Guarantor under this Agreement at or prior to the time of such guarantee;” 

2.7 Section 7.12(b) of the Credit Agreement is hereby amended by replacing “Senior Unsecured Notes Indenture” with “the
2024 Senior Unsecured Notes Indenture and the 2027 Senior Unsecured Notes Indenture”. 
 SECTION 3. CONDITIONS PRECEDENT 

The making of the New Term Loans and the effectiveness of this Amendment on the date hereof (the “Second Amendment Effective Date”) shall be
subject to the following conditions precedent having been satisfied or duly waived: 
 3.1 Certain Documents. The
Administrative Agent shall have received each of the following, in form and substance satisfactory to the Administrative Agent: 
 (a) this
Amendment, duly executed by each of the Borrower, Holdings, the Administrative Agent, and the New Term Lender; 
 (b) Lender Consents to this
Amendment executed by each Cashless Term Lender and each Assignment Term Lender; 
 (c) a solvency certificate signed by the chief financial
officer on behalf of the Borrower, substantially in the form of Exhibit G of the Credit Agreement; 
 (d) a closing certificate of
each Loan Party, substantially in the form of Exhibit B hereto, with appropriate insertions and attachments; and 
 (e) an executed
legal opinion of Latham & Watkins LLP, counsel to the Loan Parties, in form and substance reasonably acceptable to the Administrative Agent. 

3.2 Fees and Other Amounts. The Borrower shall have paid in full in immediately available funds on the Second Amendment
Effective Date: 
 (a) all fees and reimbursable expenses that have been invoiced as of the Second Amendment Effective Date that are due and
payable to any Person under any fee letter entered into in connection with this Amendment; and 
 (b) all unpaid interest in respect of the
Existing Term Loans accrued until the Second Amendment Effective Date, payable to the Administrative Agent for the benefit of the applicable Term Lender. 

3.3 Representations and Warranties. Each of the representations and warranties contained in Section 4 below shall be
true and correct. 
 3.4 USA Patriot Act. The New Term Lender shall have received from each of the Loan Parties documentation
and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the USA Patriot Act, to the extent such documentation or other
information has been requested in writing at least five (5) Business Days prior to the Second Amendment Effective Date. 

  
 4 

 SECTION 4. REPRESENTATIONS AND WARRANTIES 

Each of Holdings and the Borrower, on behalf of itself and each Loan Party, hereby represents and warrants to the Agents and each Lender, with
respect to all Loan Parties, as follows: 
 4.1 Incorporation of Representations and Warranties from Loan Documents. After
giving effect to this Amendment, each of the representations and warranties in the Credit Agreement and in the other Loan Documents are true and correct in all material respects (except to the extent that such representation or warranty is qualified
as to materiality, in which case it shall be true and correct in all respects) on and as of the date hereof as though made on and as of such date, except to the extent that any such representation or warranty expressly relates to an earlier date;

 4.2 Corporate Power and Authority. Each of Holdings and the Borrower has taken all necessary action to authorize the
execution, delivery and performance of this Amendment, this Amendment has been duly executed and delivered by each of Holdings and the Borrower, and this Amendment is the legal, valid and binding obligation of each of Holdings and the Borrower,
enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles; and 
 4.3 Absence of Default. Neither Holdings, the Borrower nor any of its Restricted
Subsidiaries is in violation of any Requirement of Law or Contractual Obligation that could reasonably be expected to have a Material Adverse Effect. At the time of and immediately after giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing. 
 SECTION 5. LENDER ASSIGNMENT AND ASSUMPTION, CONSENTS AND WAIVERS 

5.1 Cashless Rollover of Existing Term Loans. Each Cashless Term Lender agrees that, upon the Second Amendment Effective Date,
all (or such lesser amount as the Administrative Agent may allocate to such Lender) of its Existing Term Loans shall be converted to New Term Loans under the Credit Agreement (as amended by this Amendment), and such Existing Term Loans shall be
deemed repaid in full on the Second Amendment Effective Date, including for all accrued and unpaid interest, fees, expenses and other compensation owed to such Cashless Term Lender and due and payable by the Borrower pursuant to this Amendment and
the Credit Agreement. 
 5.2 Assignment of Existing Term Loans. The Existing Term Loans of each Assignment Term Lender shall be
repaid in full on the Second Amendment Effective Date, including for all accrued and unpaid interest, fees, expenses and other compensation owed to such Lender and due and payable by the Borrower pursuant to this Amendment and the Credit Agreement.
Each Assignment Term Lender agrees to purchase pursuant to an Assignment and Assumption in accordance with Section 10.6 of the Credit Agreement on or immediately after the Second Amendment Effective Date and assume from a Lender designated by
the Administrative Agent Term Loans in an amount equal to the principal amount of such repayment (or such lesser amount as the Administrative Agent may allocate to such Lender). 

5.3 Waivers. The Administrative Agent, each Assignor party hereto and each Assignee hereby waive the requirements and benefits of
Section 10.6(b)(ii)(A) and (B) of the Credit Agreement solely with respect to the assignments made pursuant to this Section 5. Notwithstanding anything herein to the contrary, each Assignor, Cashless Term Lender and Assignment Term
Lender hereby waives the 

  
 5 

 payment of any breakage loss or expense under Section 2.21 of the Credit Agreement in connection with the
repayment of Existing Term Loans or the assignments made pursuant to this Section 5 on the Second Amendment Effective Date. The Administrative Agent, each Cashless Term Lender and Assignment Term Lender hereby waive the notice provisions of
Section 2.11(a) of the Credit Agreement with respect to the repayment of its Existing Term Loans contemplated by Sections 5.1 and 5.2, as applicable. 

5.4 Consent. The Borrower and the Administrative Agent hereby consent to the assignments made pursuant to this Section 5.
Each Term Lender holding New Term Loans shall be deemed to have consented to the transactions contemplated by this Amendment. 
 SECTION 6. MISCELLANEOUS

 6.1 Reference to and Effect on the Loan Documents. 

(a) As of the Second Amendment Effective Date, each reference in the Credit Agreement to “this Agreement,”
“hereunder,” “hereof,” “herein,” or words of like import, and each reference in the other Loan Documents to the Credit Agreement (including, without limitation, by means of words like
“thereunder”, “thereof”, “therein” and words of like import), shall mean and be a reference to the Credit Agreement as amended by this Amendment. 

(b) Except as expressly amended hereby, all of the terms and provisions of the Credit Agreement and all other Loan Documents are and shall
remain in full force and effect and are hereby ratified and confirmed. 
 (c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Administrative Agent, any Lender or any Issuing Lender under the Credit Agreement or any Loan Document, or constitute a waiver or amendment of
any other provision of the Credit Agreement or any Loan Document (as amended hereby) except as and to the extent expressly set forth herein. 

6.2 Costs and Expenses. The Borrower agrees to reimburse the Administrative Agent for its costs and expenses in connection with
this Amendment (and the other Loan Documents delivered in connection herewith) as provided in Section 10.5 of the Credit Agreement. 

6.3 Reaffirmation. Each of Holdings and the Borrower hereby confirms that the guaranties, security interests and liens granted
pursuant to the Loan Documents continue to guarantee and secure the Obligations as set forth in the Loan Documents and that such guaranties, security interests and liens remain in full force and effect. Each of Holdings and the Borrower confirms and
ratifies its obligations under each of the Loan Documents executed by it after giving effect to this Amendment. 
 6.4
Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Receipt by the Administrative Agent of a facsimile copy of an executed signature page hereof shall constitute receipt by the Administrative Agent of an executed counterpart of this Amendment. 

6.5 Governing Law. THIS AMENDMENT, AND ALL CLAIMS OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) THAT MAY BE
BASED UPON, ARISE OUT OF OR RELATE IN ANY WAY TO THIS AMENDMENT, OR THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLE OF CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW. 

  
 6 

 6.6 Loan Document and Integration. This Amendment shall constitute a Loan Document,
and together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof. 

6.7 Headings. Section headings contained in this Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purposes. 
 6.8 Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT. 
 6.9 CUSIP. The
New Term Loans will be considered a continuation of the Existing Term Loans only for the purpose of determining the CUSIP. The parties hereto consent that the Existing Term Loan CUSIP 01973JAH2 will automatically be applicable to the New Term Loan
facility as of the Second Amendment Effective Date. 
 [SIGNATURE PAGES FOLLOW] 

  
 7 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by
their respective officers and members thereunto duly authorized, as of the date indicated above. 
  

			
	ALLISON TRANSMISSION HOLDINGS, INC.
		
	By:	 	 /s/ David S. Graziosi

	Name:	 	David S. Graziosi
	Title:	 	President, Chief Financial Officer and Assistant Secretary
	
	ALLISON TRANSMISSION, INC.
		
	By:	 	 /s/ David S. Graziosi

	Name:	 	David S. Graziosi
	Title:	 	President, Chief Financial Officer and Assistant Secretary

 [Signature Page to Amendment No. 2] 

 
			
	CITICORP NORTH AMERICA, INC., as
	Administrative Agent and Collateral Agent
		
	By:	 	 /s/ Joseph Ruffini

		 	Name: Joseph Ruffini
		 	Title: Authorized Signatory

 [Signature Page to Amendment No. 2] 

 Name of Lender: CITIBANK, N.A. 

Executing as the New Term Lender: 
  

			
	by	 	 /s/ Joseph Ruffini

		 	Name: Joseph Ruffini
		 	Title: Authorized Signatory

 [Signature Page to Amendment No. 2] 

 Exhibit A 

Lender Consent to Amendment No. 2 

This Lender Consent to Amendment No. 2 (the “Amendment”) to that certain Amended and Restated Credit Agreement, dated as of
September 23, 2016 (as amended by Amendment No.1 to Credit Agreement, dated as of March 24, 2017 and Incremental Facility Joinder Agreement, dated as of September 26, 2017, the “Credit Agreement”), among Allison
Transmission Holdings, Inc., a Delaware corporation, Allison Transmission, Inc., a Delaware corporation (the “Borrower”), the several banks and other financial institutions or entities from time to time parties thereto, Citicorp
North America, Inc., as Administrative Agent, and the other agents and arrangers parties thereto. Capitalized terms used but not defined in this Lender Consent have the meanings assigned to such terms in the Credit Agreement (as amended by the
Amendment). 
 The undersigned hereby irrevocably and unconditionally agrees to approve the amendments to the Credit Agreement contained in the Amendment
and to the following (check only ONE option): 
 Cashless Settlement Option 

☐ to deem prepaid 100% of the outstanding principal amount of the Existing Term Loans held by such Lender (or such lesser amount
allocated to such Lender by the Administrative Agent) with proceeds of a New Term Loan in a like principal amount. 
 Assignment Settlement Option

 ☐ to have 100% of the outstanding principal amount of the Existing Term Loans held by such Lender prepaid on the Second
Amendment Effective Date and to purchase by assignment New Term Loans in a like principal amount (or such lesser amount allocated to such Lender by the Administrative Agent). 

IN WITNESS WHEREOF, the undersigned has caused this Lender Consent to be executed and delivered by a duly authorized signatory as of the
            of March, 2018. 
  

			
	  

	(insert name of the legal entity above)
		
	by	 	  

		 	Name:
		 	Title:

 For any Institution requiring a second
signature line: 
  

			
	by	 	  

		 	Name:
		 	Title:
		 	

 Name of Fund Manager (if applicable):
                                         
            

  
 A-1 

 Exhibit B 

FORM OF CLOSING CERTIFICATE 

CLOSING CERTIFICATE 
 OF

 ALLISON TRANSMISSION HOLDINGS, INC. 

Pursuant to Section 3.1(d) of Amendment No. 2, dated as of March [     ], 2018 (the
“Amendment”; unless otherwise defined herein, terms defined in the Amendment and used herein shall have the meanings given to them in the Amendment), to that certain Amended and Restated Credit Agreement, dated as of
September 23, 2016 (as amended, restated, supplemented or otherwise modified from time to time, including but not limited to, the Amendment, the “ Credit Agreement”), among Allison Transmission Holdings, Inc.
(“Holdings”), Allison Transmission, Inc. (the “ Borrower”), the several banks and other financial institutions or entities from time to time parties to the Credit Agreement as lenders (the
“Lenders”), Citicorp North America, Inc., as Administrative Agent, and the other agents and arrangers parties thereto, the undersigned Assistant Secretary of Allison Transmission Holdings, Inc. (the “Company”),
hereby certifies on behalf of the Company as follows: 
  

	 	1.	[Eric C. Scroggins] is the duly elected and qualified [Secretary] of the Company and the signature set forth for such officer below is such officer’s true and genuine signature. 

The undersigned [Secretary] of the Company hereby certifies as follows: 

 

	 	1.	Attached hereto as Annex 1 is a true and complete copy of a Certificate of Good Standing or the equivalent from the Company’s jurisdiction of organization dated as of a recent date prior to the date hereof.

  

	 	2.	Attached hereto as Annex 2 is a true and complete copy of resolutions duly adopted by the Board of Directors of the Company on
[                        ]. Such resolutions have not in any way been amended, modified, revoked or rescinded, have been in full
force and effect since their adoption to and including the date hereof and are now in full force and effect and are the only corporate proceedings of the Company now in force relating to or affecting the matters referred to therein.

  

	 	3.	Attached hereto as Annex 3 is a true and complete copy of the Bylaws of the Company as in effect on the date hereof. 

  

	 	4.	Attached hereto as Annex 4 is a true and complete certified copy of the Articles of Incorporation of the Company as in effect on the date hereof, and such Articles of Incorporation have not been amended,
repealed, modified or restated. 

  

	 	5.	The persons listed on Schedule I hereto are now duly elected and qualified officers of the Company holding the offices indicated next to their respective names on Schedule I hereto, and the signatures appearing opposite
their respective names on Schedule I hereto are the true and genuine signatures of such officers, and each of such officers is duly authorized to execute and deliver on behalf of the Company each of the Loan Documents to which it is a party and any
certificate or other document to be delivered by the Company pursuant to the Loan Documents to which it is a party. 

  
 B-1 

	 	6.	Latham & Watkins LLP may rely on this certificate in rendering its opinion. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

  
 B-2 

 IN WITNESS WHEREOF, the undersigned have hereunto set our names as of the date set forth
below. 
  

									
		  		  		  	ALLISON TRANSMISSION HOLDINGS, INC.
			
	  
	  		  	  

	Name:	  	[Eric C. Scroggins	  		  	Name:	 	[David S. Graziosi
	Title:	  	Vice President, General Counsel and Secretary]	  		  	Title:	 	President and Chief Financial Officer]
	Date:	  	March [      ], 2018	  		  		 	

 [Signature Page to Amendment No. 2 Closing Certificate] 

 Schedule I 

to Closing Certificate 
  

					
	 NAME
	  	 OFFICE
	  	 SIGNATURE

	[David S. Graziosi	  	President and Chief Financial Officer]	  	  

			
	[Eric C. Scroggins	  	Vice President, General Counsel and Secretary]	  	  

 [Signature Page to Amendment No. 2 Closing Certificate—Incumbency]sgh-ex101_143.htm

 

Exhibit 10.1

 

March 14, 2018

 

 

 

Mr. Ajay Shah

SMART Global Holdings, Inc.

c/o SMART Modular Technologies, Inc.

39870 Eureka Dr.

Newark, CA 94560

 

Dear Ajay:

 

          On behalf of SMART Global Holdings, Inc. (“SMART” or the “Company”), I am delighted to offer you, and that you have accepted such offer, from the date hereof until the date you become the sole Chief Executive Officer of the Company (“CEO”), the exempt position of Executive Chairman and Co-Chief Executive Officer (“Co-CEO”) and, from the date on which you become the sole CEO of the Company, the position of Chairman of the Board of Directors of SMART (the “Board”) and CEO. In each of these positions, you will be reporting directly to the Board.

 

You will receive a three-year employment agreement with automatic and successive one-year renewal terms unless terminated by either party 60 days prior to the expiration of the then current term. The employment agreement will include the provisions set forth in this offer letter as well as other mutually agreed terms and conditions typical for an employment contract for the position and responsibilities of a President and CEO of a company of similar size and industry as SMART; provided that such agreement will not provide you with any additional benefits upon a termination of your employment other than with respect to the treatment of equity awards consistent with the termination of employment provisions described in Exhibit A.

 

Your start date as Co-CEO will be March 14, 2018.

 

Your compensation package will include the following:

 

           1.  Base Salary.  Base salary of $1,924 per 2-week pay period, payable in accordance with the normal payroll policies of SMART Modular Technologies, Inc. and subject to the usual, required withholdings and deductions. The base salary shall increase commensurate with minimum wage requirements if applicable.

 

     2.  Performance Bonus. Other than as set forth in this letter, you will not be eligible to participate in any cash or other bonus or incentive compensation plans.

 

           3. Equity Awards. In consideration for your service to date as Executive Chairman and your continuing service transitioning into the role of Co-CEO and then President and sole 

page 1 of 9

 

c/o SMART Modular Technologies ♦ 39870 Eureka Dr. ♦ Newark, CA 94560 ♦ Tel: 510-624-8159 ♦ Fax: 510-624-823

 

CEO of the Company, on the date hereof, you will be granted the equity awards described in Exhibit A pursuant to the SMART Global Holdings, Inc. Amended and Restated 2017 Share Incentive Plan (as amended from time to time, the “Plan”). All future equity awards will contain acceleration provisions substantially similar to those described in Exhibit A in the event of a termination without “Cause” or a resignation for “Good Reason” (each as defined in Exhibit A) with and without a Change in Control substantially similar to those described in Exhibit A.

 

       All equity awards and underlying shares are subject to the Amended and Restated Sponsor Shareholders Agreement dated May 30, 2017 (the “SSA”) to which you are a party, as such agreement may be amended from time to time pursuant to its terms; provided, that nothing in the SSA will negatively affect the material economic terms described in Exhibit A.  For the avoidance of doubt, provisions in the SSA relating to the voting of shares shall not be deemed to negatively affect the material terms described in Exhibit A. Additionally, to the extent the terms of Article III of the SSA prevent you from exercising your options and/or selling shares to cover the exercise price of your options or to cover your tax obligations upon such exercise, such prohibition shall not be deemed to negatively affect the material terms described in Exhibit A to the extent that the term of such options continues or is extended until such time as the SSA does not prohibit such exercise of options and/or sale of such shares.

 

           4.  Benefits. Upon your start of employment you will be eligible to participate in SMART’s Executive Benefits Program, which includes an annual comprehensive physical exam, financial counseling services, life insurance, and disability benefits as well as a number of company-sponsored benefits, subject in each case to the generally applicable terms and conditions of each particular plan. Your eligibility for, and benefits under, all employee benefit plans and programs will be determined under the terms of those plans and programs, but in all cases will be on terms at least as favorable to you as is available to any officer or director of SMART.  The company-sponsored plans include group healthcare insurance, group term life insurance, and long-term and short-term disability insurance. SMART’s healthcare insurance package consists of medical, dental, vision and prescription coverage. You will begin accruing vacation, at the rate of 20 days per year, on your first day of employment.  After three months of employment, you will automatically be enrolled in SMART’s 401(k) program at the automatic enrollment rate whereby 5% of your gross pay per paycheck will be deferred into your 401(k) account. You can contact Fidelity, our 401(k) provider, to opt-out of this automatic service by calling 1-800-835-5097, or you can contact HR for more information.  

 

           5.  Indemnification. If needed to provide protection in your new capacity, your current indemnification agreement with SMART (formerly known as Saleen Holdings, Inc.) dated September 13, 2011 will be amended as appropriate. You will be entitled to an indemnification agreement and liability insurance on terms at least as favorable to you as is available to any officer or director of SMART, which indemnification and insurance coverage shall survive your termination of employment. 

 

page 2 of 9

 

c/o SMART Modular Technologies ♦ 39870 Eureka Dr. ♦ Newark, CA 94560 ♦ Tel: 510-624-8159 ♦ Fax: 510-624-823

 

       This offer, and any employment pursuant to this offer, is contingent on you: (1) providing the legally required proof of your identity and authorization to work in the United States, and (2) executing and complying with the Company’s standard Employment, Confidential Information and Invention Assignment Agreement (the “Confidentiality Agreement”) and the Company’s standard Arbitration and Class Action Waiver Agreement.  Prior to your signing the Confidentiality Agreement, Section 7 of the Confidentiality Agreement will be amended to include carve-outs reasonably acceptable to you to permit you to conduct reasonable activities in your capacity as a private equity investor and manager and to permit recruiting activities that are general in nature and not directed specifically at employees of the Company and/or in which you have no material involvement.

 

     By signing and accepting this offer, you represent and warrant that: (i) you are not subject to any pre-existing contractual or other legal obligation with any person, company or business enterprise which would prohibit your employment with, or your providing services to, SMART as its employee or to any of SMART’s affiliates; and (ii) you have not and shall not use in the course of your employment with SMART and to the benefit of SMART, any confidential or proprietary information of another person, company or business enterprise to whom you currently provide, or previously provided services.

 

     To confirm your acceptance of this offer, please sign below.  I look forward to your positive response, and I am very excited about your re-taking the reins at SMART.  

 

 

Sincerely,

 

 /s/ IAIN MACKENZIE        

 

Iain MacKenzie

 

 

ACCEPTED AND AGREED:

 

 

/s/ AJAY SHAH__________

Ajay Shah

 

Date: March 14, 2018

 

 

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c/o SMART Modular Technologies ♦ 39870 Eureka Dr. ♦ Newark, CA 94560 ♦ Tel: 510-624-8159 ♦ Fax: 510-624-823

 

EXHIBIT A

Initial Equity Awards

 

1.  Time-Based Option Award. 450,000 time-based options to purchase ordinary shares of SMART with an exercise price equal to the closing price on the date of grant. These options will vest in four equal tranches of 25% (or 112,500 ordinary shares) on each annual anniversary of the grant date provided that at such time you are serving as CEO or Co-CEO.

 

2. 1.5X Performance-Based Option Award.  225,000 performance-based options to purchase ordinary shares of SMART with an exercise price equal to the closing price on the date of grant. These options will be eligible to vest in four equal tranches of 25% (or 56,250 ordinary shares) on each annual anniversary of the grant date if (i) the 30 trading day rolling average closing price of an ordinary share of SMART equals or exceeds 150% of the exercise price (such 30 trading day average, the “150% Price Target”) at any time during the four year period following the grant date, and (ii) you are serving as  CEO or Co-CEO on the date of vesting occurring after the 150% Price Target is first achieved (provided that if the 150% Price Target is satisfied after any annual vesting date for any portion of the option, such prior portion or portions will vest upon achievement of the 150% Price Target). The Company will monitor performance versus the 150% Price Target and, upon satisfaction thereof, the Board will certify that the 150% Price Target has been satisfied and promptly notify you that the 150% Price Target being achieved. If the 150% Price Target is not achieved during said four year period, these options will terminate on the fourth anniversary of the grant date.

 

3. 2.0X Performance-Based Option Award.  225,000 performance-based options to purchase ordinary shares of SMART with an exercise price equal to the closing price on the date of grant. These options will be eligible to vest in four equal tranches of 25% (or 56,250 ordinary shares) on each annual anniversary of the grant date if (i) the 30 trading day rolling average closing price of an ordinary share of SMART equals or exceeds 200% of the exercise price (such 30 trading day average, the “200% Price Target”) at any time during the seven year period following the grant date, and (ii) you are serving as CEO or Co-CEO on the date of vesting occurring after the 200% Price Target is first met (provided that if the 200% Price Target is satisfied after any annual vesting date for any portion of the option, such prior portion or portions will vest upon achievement of the 200% Price Target). The Company will monitor performance versus the 200% Price Target and, upon satisfaction thereof, the Board will certify that the 200% Price Target has been satisfied and promptly notify you that the 200% Price Target being achieved.  If the 200% Price Target is not achieved during said seven year period, these options will terminate on the seventh anniversary of the grant date.

 

4. Term of Initial Equity Awards.  All of the above equity awards will have an eight year term unless earlier terminated as set forth above or in the Plan or the award agreement.  The post-termination periods of exercisability provided by the award agreement will be at least as favorable as those provided in the Company’s standard form option award agreement, and if you are terminated for Cause, you will have 30 days to exercise any vested options that were vested and outstanding immediately prior to your termination, and, to the extent the terms of the SSA or applicable securities laws prevent you from exercising your options and/or selling shares to cover the exercise price of your options or to cover your tax obligations upon such 

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c/o SMART Modular Technologies ♦ 39870 Eureka Dr. ♦ Newark, CA 94560 ♦ Tel: 510-624-8159 ♦ Fax: 510-624-823

 

exercise, the term of such options will be extended until fifteen (15) days after the time the SSA or applicable securities laws do not prohibit such exercise of options and/or sale of such shares.  In addition, to the extent your performance-based options are scheduled to expire at a time that the Board is determining whether the applicable 150% Price Target and/or the 200% Price Target have been met and certifying the same, the term of such options will be extended until fifteen (15) days after such certification has been made.  You will be permitted to transfer any portion of the vested or unvested equity awards to immediate family members, estate planning entities benefitting you or immediate family members and/or to a charity, charitable foundation or similar organization.  

 

5. Termination of Employment Not in Connection with a Change in Control.  In the event of a termination of your employment other than for Cause (as defined below) or a termination of your employment for Good Reason (as defined below) and in either case, not in connection with a Change in Control (as defined in below), then, with respect to options that have not previously terminated, (i) 25% of the total number of initial time-based options granted that were not previously vested, will have their vesting accelerated at the time of termination in addition to any options previously vested, (ii) 25% of the initial amount of each performance-based option grant that were not previously vested, will have their vesting accelerated at the time of termination in addition to any options previously vested but only if the 30 trading day rolling average closing price of an ordinary share of SMART equals or exceeds the percentage of the exercise price as shown on Schedule 1 of the 1.5X performance-based option award and/or the 2.0X performance-based option award, respectively, on the termination date when the termination occurs in the time periods as set forth on Schedule 1. All other equity awards will be forfeited upon termination, and all other unvested equity grants will be terminated.  For the avoidance of doubt, the accelerated vesting provided by this Section and Section 6 will be applied only after the determination of any vesting earned through performance goal achievement up to and including your date of termination. For example, if you are terminated other than for Cause in the fourth year of employment and the 150% price target is satisfied as of your termination date, you will receive vesting of 100% of the 1.5X option (75% having been earned for your first three years of employment and an additional 25% under this Section 5).  The accelerated vesting provided in this Section 5 also shall apply for a termination due to death or disability.  For the avoidance of doubt, the terms of this Section 5 shall not apply in the event you cease to be CEO or Co-CEO, but agree to continue as Executive Chairman and, in connection with such role, are involved in the day to day management of the Company at a level substantially more significant than the Company’s non-employee directors.

 

6. Termination of Employment in Connection with a Change in Control. In the event of a termination other than for Cause or a termination for Good Reason in either case, in connection with a Change in Control, then, with respect to options that have not previously terminated, (i) 100% of the unvested initial time-based options will have their vesting accelerated at the time of termination, and (ii) 100% of the unvested initial performance-based options will have their vesting accelerated at the time of termination but only if the 30 trading day rolling average closing price of an ordinary share of SMART equals or exceeds the percentage of the exercise price as shown on Schedule 1 of the 1.5X performance-based option award and/or the 2.0X performance-based option award, respectively, on the 

page 5 of 9

 

c/o SMART Modular Technologies ♦ 39870 Eureka Dr. ♦ Newark, CA 94560 ♦ Tel: 510-624-8159 ♦ Fax: 510-624-823

 

termination date when the termination occurs in the time periods as set forth on Schedule 1. All other equity awards will be forfeited upon termination, and all other unvested equity grants will be terminated. In the event of a Chang in Control, the 30 trading day rolling average closing price of an ordinary share of SMART shall be deemed to be the price per share paid in the Change in Control. “In connection with a Change in Control” refers to the period that begins two months before the Change in Control and ends 12 months after the Change in Control.  For the avoidance of doubt, the terms of this Section 6 shall not apply in the event you cease to be CEO or Co-CEO, but agree to continue as Executive Chairman and, in connection with such role, are involved in the day to day management of the Company at a level substantially more significant than the Company’s non-employee directors.

 

7. Definitions. “Good Reason” shall mean the occurrence, without your written consent, of any of the following events: (A) a material reduction in the nature or scope of your responsibilities, duties or authority from those contemplated as a Board member or CEO of publicly-held company similar in size to SMART, (B) causing or requiring you to report to any person other than the Board, (C) the relocation of your primary office to a location that is not within a fifty (50) mile radius of  SMART’s offices in Newark, California, (D) a material reduction in the disability or death benefits provided to you, other than a reduction of not more than 10% that applies to all executives generally, (E) a material reduction in the health benefits provided to you, other than a reduction that applies to all executives generally, (F) if (and only if) your salary or bonus opportunity increase to a meaningful level (of at least $500,000 annually or more), a material reduction in your salary or bonus opportunity, other than a reduction of not more than 10% that applies to all executives generally, or (G) the Company’s material violation of a material provision of this offer letter (or any other material provision of a material agreement between you and the Company or any of its affiliates (the “Company Group”)); provided, that any such event described in (A) through (G) above shall not constitute Good Reason unless you deliver to the Board a Notice of Termination for Good Reason within ninety (90) days after you first learn of the existence of the circumstances giving rise to Good Reason, and within thirty (30) days following the delivery of such Notice of Termination for Good Reason, SMART has failed to cure the circumstances giving rise to Good Reason and following such failure to cure, you resign your employment within thirty (30) days thereof.

 

“Cause” shall mean: (A) an act of material fraud or material dishonesty against any member of the Company Group in connection with the performance of your responsibilities that the Board reasonably determines will damage the business of any member of the Company Group, (B) your conviction of, or plea of nolo contendere to ̧ a felony (excluding traffic offenses) which the Board reasonably determines had or will have a materially detrimental effect on the reputation or business of the Company Group, (C) intentional or gross misconduct which the Board reasonably determines had or will have a materially detrimental effect on the reputation or business of the Company Group, (D) intentional improper disclosure of Confidential Information (as defined in the Confidentiality Agreement) which the Board reasonably determines had or will have a materially detrimental effect on the reputation or business of the Company Group, or (E) your material violation of a material Company Group policy or a material provision of this offer letter (or any other material provision of a material agreement between you and any member of the Company Group), 

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c/o SMART Modular Technologies ♦ 39870 Eureka Dr. ♦ Newark, CA 94560 ♦ Tel: 510-624-8159 ♦ Fax: 510-624-823

 

after written notice from the Company, and a reasonable opportunity of not less than thirty (30) days to cure (to the extent curable) such violations during which time you will be given a reasonable opportunity to address any issues with the Board.  

 

“Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole; 

(ii) any person or group, other than any of the Silver Lake Investors or any of their respective Affiliates, is or becomes the Beneficial Owner, directly or indirectly, of more than fifty percent (50%) of the total voting power of the outstanding voting shares of the Company, including (but not limited to) by way of merger, amalgamation or consolidation or otherwise;

(iii) Silver Lake Investors, together and/or any of their respective Affiliates, is or becomes the Beneficial Owner, directly or indirectly, of more than eighty percent (80%) of the total voting power of the outstanding voting shares of the Company, including (but not limited to) by way of merger, amalgamation or consolidation or otherwise; or

(iv) during any period of twelve consecutive months, individuals who at the beginning of such period constitute the Board, and any new directors (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in subsections  (i), (ii) or (iii)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a majority of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board.

 

8. Dividends. In the event that SMART were to make an extraordinary cash dividend or upon the occurrence of another event described in Section 4(d) of the Plan, an equitable adjustment will be made in the exercise price of all option grants and an equitable adjustment will be made in each of the 150% Price Target and the 200% Price Target in a manner reasonably expected to prevent diminution of the value of the award to be caused by the occurrence of such event.

 

9. Right to Net-Exercise.  Except if prohibited by Article III of the SSA or applicable securities laws, SMART will permit the sale of a number of ordinary shares that are issued under any equity award, which SMART determines is sufficient to generate an amount that pays the exercise price and/or meets the tax withholding obligations under applicable law or regulation, plus additional shares to account for rounding and market fluctuations, and payment of such exercise price and/or tax withholding to SMART, and such shares may (but will not be required to) be sold as part of a block trade with other Plan participants.

 

10. Exercise of Discretion. Notwithstanding any contrary provision of the Plan or of any award agreement, the Committee (as defined in the Plan) will not use its authority or discretion under the Plan, including, but not by way of limitation, under Sections 3(a)(vi), 3(a)(vii), 4(d), 9(d), and 14(a) of the Plan, to implement a change of any term of your awards 

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c/o SMART Modular Technologies ♦ 39870 Eureka Dr. ♦ Newark, CA 94560 ♦ Tel: 510-624-8159 ♦ Fax: 510-624-823

 

that would divest you of any value or rights under the any of the options described above.  The preceding prohibition shall be reflected in all applicable award agreements.  Any clawback policy described in Section 15(a) of the Plan shall not, by its terms, discriminate against you except to the extent required by law.  The Company will use its commercially reasonable best efforts to avoid the application of Section 15(n) to any award granted to you (or shares acquired under any such award).

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c/o SMART Modular Technologies ♦ 39870 Eureka Dr. ♦ Newark, CA 94560 ♦ Tel: 510-624-8159 ♦ Fax: 510-624-823

 

Schedule 1

 

 

			
	
Year After Grant That Termination Occurs
	
Target 30 Trading Day Rolling Average as % of Exercise Price of 1.5X Option
	
Target 30 Trading Day Rolling Average as % of Exercise Price of 2.0X Option

	
During 1st Year
	
111%
	
110%

	
During 2nd Year
	
122%
	
122%

	
During 3rd Year
	
135%
	
135%

	
During 4th Year
	
150%
	
150%

	
During 5th Year
	
 
	
164%

	
During 6th Year
	
 
	
181%

	
During 7th Year
	
 
	
200%

 

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c/o SMART Modular Technologies ♦ 39870 Eureka Dr. ♦ Newark, CA 94560 ♦ Tel: 510-624-8159 ♦ Fax: 510-624-823

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